Instructions in Help file on how to create an ER Diagram with relationships is not correct.
Here are the instructions as they appear in the Help file:
Tip: You can select the type of relationships to display in the diagram, and the number of levels of referential tables to include in Modeling Options <TSOptions.chm::/Database/Modeling_Options.htm> (Tools | Options | Database | Modeling).
The "Modeling" option does not exist.
An enhancement request has been submitted to Development for consideration in future release for Toad for MySQL