I sent an email to the publisher. They replied very quickly. (I was surprised.)
.....Thanks for pointing out this error to us. I agree this is a pretty bad one, especially since the information is so easy to check. This book was produced out of our London office more than seven years ago, so I'm not sure if it will be possible to figure out how this happened.
Unfortunately, errors do creep into our books occasionally, and all we can do is correct them for future reprints of the book. I'll get in contact with the London team and ask that they do so on this title. I realize this does little to fix the problem of there already being many, many books out there with wrongly-identified caterpillars, but, as you've already inferred, there really isn't much we can do about that now.
Please accept our apologies for the fact that this book was not up to the usual DK standards. It does bother us when we see an error like this--and hopefully it increases our vigilance against committing similar errors in the future....