Feedback based on state overlap need not be stabilizing ($f=\mathrm{Tr}({\rho }_d\rho )\nRightarrow \dot{V}\le 0$)

Take $H_0=0$, $H_1={\sigma }_y/2$, ${\rho }_d=(I+{\sigma }_z)/2$ and $\rho =(I+{\sigma }_x)/2$. The overlap is $f=1/2$, but $C=\mathrm{Tr}({\rho }_d[-i{H}_1,\rho ])=-1/2$, so the Hilbert-Schmidt Lyapunov feedback identity gives $\dot{V}=1/2>0$. A target overlap and the derivative of that overlap along the control direction are different quantities.