As Ned Flanders would say:
Oh, That’s A Noodle-scratcher.
I must admit defeat. Though I followed all the reasoning, I couldn’t find the flaw.
I had to look it up on, of all places, Wikipedia.
Answer and link below the quote….
This problem! From Calculus By Michael Spivak we suffer on first course. I’ve used it many times and few people are right, even people of sciences. Though I suppose this will be very easy for many of you. For others don’t, of course. That is the funny.
Clue: two is not one, definitely. You all know it!”
The flaw arises when moving from line 3 to 4, ie divide by (x-y).
Can’t be done, because if x=y then that’s the same as dividing by zero, which is a big no-no.