Where is the error in the following proof that $f\colon[-1, 1] \to \mathbb{R}$ given by $f(x)= \cos(x)$ is not a contraction.
We have that $f'(x) = -\sin(x)$ and so for all $x \in [-1,1], |f'(x)| \leq 1$. So F is Lipschitz continuous with $K = 1$. Since $K$ is not less than 1, $f$ is not a contraction.
The problem is this line
Note that while you proved that $K=1$ works, you did not prove that this is the best which works.
To inderstand the issue look at $f(x)=\frac{1}{2}x$. You have that $|f'(x)|<1000$ and hence $f$ is 1000-Lipschitz continuous. But this does not prove that $f$ is not a contraction, actually it is easy to see that $f$ is also $\frac{1}{2}$-Lipschitz continuous.