There is no definitive answer. Times have changed. The UM fans have changed. No fanbase is waiting 3 years anymore especially if the first year was an absolute mess. (I.E., losing season) Not even in the NFL do coaches get a guaranteed 3 years no matter what. (Looking at you Brian Flores) With that said, here is how I see it playing out.
5-7: Hes fired or forced to resign with a fair buyout compromise especially if he refuses to fire his entire staff.
6-6 or 7-5: One year leash. Diaz would have to show vast improvement in year 2 to not be let go after the season.
7-5 or better: Will be afforded the full 3 years to right the ship even if the fans don't think he deserves it.