The diode (B560C) is a must have component for this buck regulator. Without this diode, the inductor will not be able to discharge its energy when HS FET turns off. It acts like an open circuit with energized inductor, and the inductor will arc to release the energy. The regulator may have been damaged due to the arcing. With the diode, the inductor current will be able to flow to output when HS FET is off.