Correlation Diagram Doesn't Match Selection Rules?
No, it's not an error. Take a look at the Tanabe Sugano diagram for $d^2$ (from Wikipedia):



You can see that again, the $^1D$ state is below the $^3P$ state. Why? If we were considering a $p^2$ configuration, the $^3P$ is indeed lower in energy than $^1D$. And again anyone might predict that $^3P$ is lower for $d^2$ too, for the exact reasons you give.

We know this result from spectroscopy. The difference is because of the Racah parameters for the different terms (i.e., the electrostatic repulsion between electrons in the same orbital. The Wikipedia article had a nice link to how you'd compute the difference in this case.

Now of course a $^3F \rightarrow ^1D$ transition is not an allowed transition, which is shown in the textbook on the next page.

The moral of the story is that Hunds' rules and the basics will always get you the lowest energy term symbols for multi-electron atoms, but the details can be tricky for higher-level states.