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I would like to settle for a solution like the following for now:

(defun my/org-babel-plantuml-header-args ()
  "Set dynamic header arguments for PlantUML source blocks."
  (let ((output-dir (org-attach-dir-get-create)))
    `((:results . "file link")
      (:output-dir . ,output-dir)
      (:file-ext . "png")
      (:exports . "results"))))

  (setq org-babel-default-header-args:plantuml
         (my/org-babel-plantuml-header-args))

I would have to set the file manually, but I wrote a simple snippet for convenience, and most of my initial requirements would be fulfilled.

Unfortunately, the (org-attach-dir-get-create) function is called on Doom Emacs startup which causes errors and some destructive editing of my literate config file. The function is trying to create a property drawer with an ID field.

Regarding my initial goal, which was to have the diagram files created in the attachment directory, and displayed in the buffer, it is not possible to achieve using the header default arguments.

As @NickD commented, any function used there to set an option is only called once upon setting the org-babel-default-header-args:plantuml variable. This approach even had other adverse effects as I am using an org config file.

I managed to achieve the same results by using a custom function in a Yasnippet snippet to build the output-dir string. It works fine, just has a bit of a cluttered header.

Sorry if this thread is a bit all over the place. If future readers are looking to achieve the same kind of thing, I would gladly share the snippet code, and the custom hook function to set the attachment tag to the appropriate org node. I am not posting it because it uses Org-roam which is a niche use case I think, and I think it is off-topic considering how the thread started.

I settled for the following solution for now:

I have to set the file manually, but I wrote a simple snippet for convenience, and most of my initial requirements are fulfilled.

Please note that my first attempt does not work well for me after further testing. The (org-attach-dir-get-create) function is called on Doom Emacs reload and startup which causes errors and some destructive editing of the config file. I have not tested on plain Emacs.

If other users can reproduce this buggy behavior on plain Emacs, maybe I could report it as a bug. Thanks.

I would like to settle for a solution like the following for now:

I would have to set the file manually, but I wrote a simple snippet for convenience, and most of my initial requirements would be fulfilled.

Unfortunately, the (org-attach-dir-get-create) function is called on Doom Emacs startup which causes errors and some destructive editing of my literate config file. The function is trying to create a property drawer with an ID field.

=== EDIT ===

After further testing, I jumped to the wrong conclusion when blaming this buggy behavior on the dynamic setting of the output directory.

I can reproduce it every time I set both output-dir and file within the org-babel-default-header-args variable even with a static string.

I settled for the following solution for now:

(defun my/org-babel-plantuml-header-args ()
  "Set dynamic header arguments for PlantUML source blocks."
  (let ((output-dir (org-attach-dir-get-create)))
    `((:results . "file link")
      (:output-dir . ,output-dir)
      (:file-ext . "png")
      (:exports . "results"))))

  (setq org-babel-default-header-args:plantuml
         (my/org-babel-plantuml-header-args))

I have to set the file manually, but I wrote a simple snippet for convenience, and most of my initial requirements are fulfilled.

Please note that my first attempt does not work well for me after further testing. The (org-attach-dir-get-create) function is called on Doom Emacs reload and startup which causes errors and some destructive editing of the config file. I have not tested on plain Emacs.

If other users can reproduce this buggy behavior on plain Emacs, maybe I could report it as a bug. Thanks.