The step with a mistake is Step #4. The correct version of Step #4 should say:
"Use a straight edge to draw a line that passes through point C, which is the intersection of the fold and line segment AB. This line is the perpendicular bisector of AB."
This means the best correction for Step #4 is:
"Use a straight edge to draw a line that passes through point C (but not points A and B). This line is a bisector of AB."
To clarify, when Liam folds the paper to make point A coincide with point B, point C will mark the midpoint of segment AB. The line drawn through point C will be the perpendicular bisector of segment AB, properly bisecting it into two equal lengths.