In Diagram 1 since the block on the right of the fault was most likely moved upwards relative to the block on the left why has it been eroded to a lower elevation?

The block on the right is most likely moving upward relative to the block on the left due to tectonic forces, but erosion acts independently of tectonic movement. Erosion can lower the elevation of a block over time through processes like weathering, mass wasting, and transport of sediment, regardless of its tectonic movement.