Why he no mock

fixed.Unit.Tests.ps1

$script:ModuleName = 'SQLDiagAPI'
# Removes all versions of the module from the session before importing
Get-Module $ModuleName | Remove-Module
$ModuleBase = Split-Path -Parent $MyInvocation.MyCommand.Path
# For tests in .\Tests subdirectory
if ((Split-Path $ModuleBase -Leaf) -eq 'Tests') {
    $ModuleBase = Split-Path $ModuleBase -Parent
}

Import-Module $ModuleBase\$ModuleName.psd1 -ErrorAction Stop #| Out-Null
InModuleScope -ModuleName SQLDiagAPI {
    Describe "Get-SQLDiagRecommendations" -Tags Build , Unit {

        Context "Requirements" {
            BeforeAll {
                Mock Get-ChildItem {}
                Mock Write-Warning {"Warning"}
            }
            It "Should throw a warning if there is no API Key Environment Variable" {
                Get-SQLDiagRecommendations -ErrorAction SilentlyContinue -WarningAction SilentlyContinue | Should Be "Warning"
            }
            It 'Checks the Mock was called for Get-ChildItem' {
                $assertMockParams = @{
                    'CommandName' = 'Get-ChildItem'
                    'Times'       = 1
                    'Exactly'     = $true
                }
                Assert-MockCalled @assertMockParams 
            }
            It 'Checks the Mock was called for Write-Warning' {
                $assertMockParams = @{
                    'CommandName' = 'Write-Warning'
                    'Times'       = 1
                    'Exactly'     = $true
                }
                Assert-MockCalled @assertMockParams 
            }

        }
        Context "Input" {

        }
        Context "Execution" {

        }
        Context "Output" {
        
        }
    }
}

Get-SQLDiagRecommendations.ps1

function Get-SQLDiagRecommendations {
    [cmdletbinding()]
    Param()
if(!(Get-ChildItem Env:MS_SQLDiag_APIKey -ErrorAction SilentlyContinue)){
        Write-Warning "You have not created an Environment Variable MS_SQLDiag_APIKey to hold the APIKey
         You can do this using [Environment]::SetEnvironmentVariable(`"MS_SQLDiag_APIKey`", `"APIKEYGOESHERE`", `"User`") 
         You can get a key by following the steps here https://ecsapi.portal.azure-api.net/ "
}
}

Unit.Test.ps1

$script:ModuleName = 'SQLDiagAPI'
# Removes all versions of the module from the session before importing
Get-Module $ModuleName | Remove-Module
$ModuleBase = Split-Path -Parent $MyInvocation.MyCommand.Path
# For tests in .\Tests subdirectory
if ((Split-Path $ModuleBase -Leaf) -eq 'Tests') {
    $ModuleBase = Split-Path $ModuleBase -Parent
}

Import-Module $ModuleBase\$ModuleName.psd1 -PassThru -ErrorAction Stop | Out-Null
Describe "Get-SQLDiagRecommendations" -Tags Build , Unit{

    Context "Requirements" {
        BeforeAll {
        Mock Get-ChildItem {}
        Mock Write-Warning {"Warning"}
        }
        It "Should throw a warning if there is no API Key Environment Variable"{
            Get-SQLDiagRecommendations -ErrorAction SilentlyContinue -WarningAction SilentlyContinue | Should Be "Warning"
        }
        It 'Checks the Mock was called for Get-ChildItem' {
            $assertMockParams = @{
                'CommandName' = 'Get-ChildItem'
                'Times'       = 1
                'Exactly'     = $true
            }
            Assert-MockCalled @assertMockParams 
        }
        It 'Checks the Mock was called for Write-Warning' {
            $assertMockParams = @{
                'CommandName' = 'Write-Warning'
                'Times'       = 1
                'Exactly'     = $true
            }
            Assert-MockCalled @assertMockParams 
        }

    }
    Context "Input" {

    }
    Context "Execution" {

    }
    Context "Output" {
        
    }
    AfterAll {
        Get-Module $ModuleName | Remove-Module
    }
}

Works.Unit.Tests.ps1

$script:ModuleName = 'SQLDiagAPI'
# Removes all versions of the module from the session before importing
Get-Module $ModuleName | Remove-Module
$ModuleBase = Split-Path -Parent $MyInvocation.MyCommand.Path
# For tests in .\Tests subdirectory
if ((Split-Path $ModuleBase -Leaf) -eq 'Tests') {
    $ModuleBase = Split-Path $ModuleBase -Parent
}

Import-Module $ModuleBase\$ModuleName.psd1 -ErrorAction Stop #| Out-Null
Describe "Get-SQLDiagRecommendations" -Tags Build , Unit{
    function Get-SQLDiagRecommendations {
        [cmdletbinding()]
        Param()
        if (!(Get-ChildItem Env:MS_SQLDiag_APIKey -ErrorAction SilentlyContinue)) {
            Write-Warning "You have not created an Environment Variable MS_SQLDiag_APIKey to hold the APIKey
         You can do this using [Environment]::SetEnvironmentVariable(`"MS_SQLDiag_APIKey`", `"APIKEYGOESHERE`", `"User`") 
         You can get a key by following the steps here https://ecsapi.portal.azure-api.net/ "
        }
    }

    Context "Requirements" {
        BeforeAll {
        Mock Get-ChildItem {}
        Mock Write-Warning {"Warning"}
        }
        It "Should throw a warning if there is no API Key Environment Variable"{
            Get-SQLDiagRecommendations -ErrorAction SilentlyContinue -WarningAction SilentlyContinue | Should Be "Warning"
        }
        It 'Checks the Mock was called for Get-ChildItem' {
            $assertMockParams = @{
                'CommandName' = 'Get-ChildItem'
                'Times'       = 1
                'Exactly'     = $true
            }
            Assert-MockCalled @assertMockParams 
        }
        It 'Checks the Mock was called for Write-Warning' {
            $assertMockParams = @{
                'CommandName' = 'Write-Warning'
                'Times'       = 1
                'Exactly'     = $true
            }
            Assert-MockCalled @assertMockParams 
        }

    }
    Context "Input" {

    }
    Context "Execution" {

    }
    Context "Output" {
        
    }
    AfterAll {
        Get-Module $ModuleName | Remove-Module
    }
}

So it is a scoping thing as the Working.unit.Tests.ps1 works but I do not understand why and I also do not understand how to fix it

Ok I fixed it - InModuleScope fixed it - still don't quite understand why!