[Documentation] Update README Diagram with MermaidJS diagram

## Update README Diagram with MermaidJS Diagram

## Background
README diagrams are currently embedded as static image assets. Replacing them with Mermaid diagrams will make them easier to maintain, review, and update directly in Markdown. Mermaid diagrams also render natively on GitHub, reducing the need to manage separate image files and keeping documentation changes closer to the source.

## Existing Behavior

## Acceptance Criteria
- [ ] All README diagrams that can be represented in Mermaid are converted from image assets to Mermaid syntax.
- [ ] Existing diagram content and relationships are preserved or updated to the current repo status

## Approach

## References
- GitHub Mermaid documentation: https://docs.github.com/en/get-started/writing-on-github/working-with-advanced-formatting/creating-diagrams
- Mermaid documentation: https://mermaid.js.org/

## Risks and Rollback

## Screenshots / Recordings