"I'll tell you a secret," Kavanagh told The MMA Hour.
"I had a plan to sit down and do this speech with him and after the weigh-ins when we were back stage on our own and he just looked at me cold, dead in the eye, and said, 'The illusion of insanity is over. Now it's time for the gameplan'.
"I was like, 'Whoa. OK. My job is done'. So he stood up there on top of the stage, screaming, then he just comes back off stage and then like a serial killer he just looked at me and said that.
"It blew me away."
McGregor went on to extact his revenge against Diaz when he was awarded the fight via a majority decision (48-47, 48-47, 48-48) in what's been dubbed in one of the greatest bouts in the fight promotion's history.
Kavanagh said the result was never in doubt.
"I saw a cool video comparing his (McGregor's) walk out of the first Nate fight compared to the second one," Kavanagh said.
"You can see that level of focus. There's no playing up to the cameras. There's no screaming. There's no moving around.
"If that didn't make Nate at least take a gulp and realise he was fighting a different guy."
That doesn't mean Diaz hasn't left the McGregor camp in awe of his ability to soak up punishment and return McGregor's fire.
Kavanagh said he was "terrified" in the middle rounds of the fight when Diaz brushed off heavy punches from his charge.
"This is possibly the toughest fine Conor is ever going to have," he said.
"Who else can take those shots? Who else can walk through shots like Nate can?
"It was a very different fight than the previous one because the previous fight, Conor was going forward a lot and Nate was retreating.
"We drew Nate in with the leg kicks and as Nate moved forward Conor hit him. You've got two forces there. You've got Conor coming forward and you've got Nate coming forward and you can't get a heavier shot than that and what does Nate do? He puts his hands out and walks forward. I'm not going to lie, I was slightly terrified."
Kavanagh has outlined his plans for McGregor to right above his 145lb featherweight division and claim the 155lb lightweight crown before defending his second title in a trilogy fight with Diaz.
It means he is pushing for McGregor's next fight to be a title fight against lightweight champion Eddie Alvarez.
The problem is that UFC boss Dana White has already ordered McGregor to defend his featherweight title against interim champion Jose Aldo or be stripped of the belt.
Kavanagh issued a major slapdown to the entire featherweight division by declaring there was no point in McGregor returning to the lighter weight class.
"I really don't see the point in it," he said.
"Unfortunately those guys didn't keep up their end of the bargain. They had to go out there and prove they deserved it, prove that they had improved and go out there and beat Aldo and they didn't. The fight was even more one-sided than their first contest. I guess Aldo had learned from the last time."
McGregor has reportedly been slapped with a medical suspension that could keep "The Notorious" out of action until 2017.
Kavanagh confirmed McGregor's pre-existing ankle fracture injury was aggravated during his fight with Diaz and must now be cleared by an orthopedic doctor or he will be ruled unavailable to fight until February, 2017.
As part of the suspension, McGregor is not allowed to resume contact training until October 5 and will not be cleared to return to the Octagon before late October at the earliest.
It means McGregor is extremely unlikely to fight in the highly-anticipated UFC 205 event at Madison Square Garden, New York, on November 12.
