Creativity happens when we invent something new by connecting several elements of reality together in one piece. These elements could be shapes, colours, notes, thoughts, words, ideas, needs, feelings, beliefs, etc.
When your attention is diffused you become simultaneously aware of everything that you hear, touch smell, taste, think and feel, together with accessing your memory and experience. When your attention is diffused for long enough the new connections happen on their own and you witness new ideas unfolding in your mind. The diffused attention style also helps to immerse with your creation and get in the Zone.
A process of generating new ideas is described in this article.