If $H$ is a normal subgroup of $G$ with $G/H$ abelian, then the commutator subgroup of $G$ is in $H$.

$G/H=\{gH: g\in G\}$ by definition. this is only a group under $(gH)(g'H) = (gg')H$ if $Hg' = g'H$. But this is just another way of stating the definition of $H$ being normal. In your proof you just neglected to note that $xyx^{-1}y^{-1}H$ is only relevant because it is equal to $(xH)(yH)(x^{-1}H)(y^{-1}H)$ because $H$ is normal.

I would call this "incomplete" rather than "wrong" if anything, as the problem is a few steps beyond reproving the basic fact that $G/H$ is only a group when $H$ is normal. I think you just forgot that that's what makes $G/H$'s group operation well-defined.