Sorry, my computation in the comments was wrong. I think it leads to something with $\rho < \frac{16}{17}$.

Namely, let $\mathcal{D}$ be the distribution with $\mathrm{Pr}(\mathcal{D}=0)=\mathrm{Pr}(\mathcal{D}=3/4)=1/N$, and $\mathrm{Pr}(\mathcal{D}=1)=(N-2)/N$, where $N$ is large.

Then the possibilities for $(x,y,z)$ which fit your conditional probability are:

- $0 < t < \frac{3}{4}$: $(0,0,\frac{3}{4})$, $(0,0,1)$
- $\frac{3}{4} < t < 1$: $(0,0,1)$, $(0,0,1)$, $(0,\frac{3}{4},1)$, $(\frac{3}{4},0,1)$, $(\frac{3}{4},\frac{3}{4},1)$

Only one of these has $z\neq 1$; if $N$ is very large, then that case will occur much less frequently and we can "ignore" it (so we're really doing the limit $N\to \infty$ computation, for convenience).

Let $\delta=1-|x-y|$ and $\delta'=1-\min(|x-y|,|z-y|)$. Then the events to consider, and their probabilities and values, are

- $0 < t < \frac{3}{4}$: $(0,0,1)$ - relative prob. $\frac{3}{7}$, $\delta=\delta'=1$
- $\frac{3}{4} < t < 1$: $(0,0,1)$ - relative prob. $\frac{1}{7}$, $\delta=\delta'=1$
- $\frac{3}{4} < t < 1$: $(0,\frac{3}{4},1)$ - relative prob. $\frac{1}{7}$, $\delta=\frac{1}{4}$, $\delta'=\frac{3}{4}$
- $\frac{3}{4} < t < 1$: $(\frac{3}{4},0,1)$ - relative prob. $\frac{1}{7}$, $\delta=\delta'=\frac{1}{4}$
- $\frac{3}{4} < t < 1$: $(\frac{3}{4},\frac{3}{4},1)$ - relative prob. $\frac{1}{7}$, $\delta=\delta'=1$

So we can compute
$$\Delta=\frac{3}{7}+\frac{1}{7}+\frac{1}{7}(\frac{1}{4})+\frac{1}{7}(\frac{1}{4})+\frac{1}{7}=\frac{11}{14}$$
$$\Delta'=\frac{3}{7}+\frac{1}{7}+\frac{1}{7}(\frac{3}{4})+\frac{1}{7}(\frac{1}{4})+\frac{1}{7}=\frac{12}{14}$$
$$\rho=\frac{\Delta}{\Delta'}=\frac{11}{12}< \frac{16}{17}$$

As mentioned, really we took the limit $N\to \infty$; but since we got $\rho< \frac{16}{17}$, that means there should be some finite $N$ we can take with $\rho< \frac{16}{17}$, just the computation will be more annoying.