Pinholes diffract light.

The diffraction effects from a pinhole camera are not what make them work. In fact, diffraction makes the photographs worse than they otherwise would be. The pinhole makes an effective aperture for photography because it's small size produces small circles of confusion on the film plane. Ideally, you would make the hole as small as possible, but beyond a certain (small) size, defraction becomes the dominant source of blurring. So the size of the pinhole should be chosen to yield the best balance between geometric blur and diffraction blur.

The diffraction is merely a limit to the smallness of the aperture, and not what creates the image.