In addition to fermentation, if the amount of unabsorbed lactose in the gut is high enough it raises the osmotic pressure, attracting water into the bowels, so water flows in and this influx of water is what leads to diarrhea.

That's why for me if I eat like a meal with cream it just makes me gassy and my stool smell very sour, but if I drink like a glass of milk on an empty stomach I will have diarrhea within 30 minutes.