Actually there are frame boundaries pre-exposed on 110 film. See my illustration below. As it is a positive, note the stark white surrounding the image.
As for square format, looking at the reviews on the Diana 110, it does look like it takes square pictures. I would rather it used the entire frame. Of course I'm not going to buy one. I like my Minolta 110 Zoom, my Minolta Weathermatic 110 and my Agfamatic 2000 110.