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There is really just too few hands that beat you to justify a fold here imo. KT (16 combos), AA (3 combos), JJ (3 combos), Qx (split pot unless he has QJ, KQ, AQ). And villian won't so up often with AA/JJ often, as limping preflop isn't standard with those hands, so we can say that only shows up a small % of the time. The chances of him having Qx is slim, obviously since only one Q is left. And against KT you have 10 outs to a fullhouse, which is as pilipolio stated 22% equity.
So you are in good shape against his range. Also given that the average 10nl player is playing any ace the same way, and he might even come alive here with two diamonds as well. But yeah, his line is poor whatever he has.
Added to the fact that so little beats you, he started with only 50bb, so folding wouldn't be very good here.
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