Suppose $M=\bigl( \begin{smallmatrix} A & 0 \\ C & B \end{smallmatrix} \bigr)\in\mathbb{C}^{n\times n}$ is unitarily diagonalizable, that means there exists an unitary matrix $U$ s.t. $U^*MU$ is a diagonal matrix. Show $A,B$ are unitarily diagonalizable too.
My method is as following:
Since a matrix $T$ is unitarily diagonalizable iff $T$ is normal, that means $T^*T=TT^*$. I try to prove $AA^*=A^*A$ and $BB^*=B^*B$. Since we know $M^*=\bigl( \begin{smallmatrix} A^* & C^* \\ 0 & B^* \end{smallmatrix} \bigr)$. Then $M^*M=MM^*$ implies $A^*A+C^*C=AA^*,C*B=AC^*,B^*C=CA^*,B^*B=CC^*+BB^*.$ It seems we cannot deduce $AA^*=A^*A$ and $BB^*=B^*B$ in this way.
Use trace to prove $C=0$ and you are close. Since $A^*A+C^*C=AA^*$ $$ Tr(A^*A+C^*C)=Tr(A^*A)+Tr(C^*C)=Tr(AA^*) $$ Since $Tr(A^*A)=Tr(AA^*)$ $$ Tr(C^*C)=0\quad\text{ and thus }\quad C=0 $$ So $A^*A=AA^*$ and $A$ is normal. Likewise $B$ is normal too.