step 1 = double click on the diamond (+1 Wisdom)
step 2 = put the diamond and the widget (Spiritcraft Armour, Brakash's Axe, or Skartoungue's Ladle) into crafting bar
step 3 = press the greyed out Augment! button?

Is this the proper procedure? Or am I doing it wrong?

The verbiage for the diamond says it should work.

A veteran player says it should work.

If I am describing a picnik issue, then please be honest.