The vertical line marks the Nyquist frequency, $pi/T_{s}$, where $T_{s}$ is the sample time. Near the Nyquist frequency, the response of the discretized compensator is distorted relative to the continuous-time response. As a result, the discretized notched filter may not properly counteract the plant resonance.
To fix this, try discretizing the compensator using the Tustin method and compare to the ZOH result. The Tustin discretization method often yields a better match in the frequency domain than the ZOH method.
Compare the frequency-domain response of C and Cdz.