Look carefully. Because you are switching on error, your first case expression reduces to
error == (error < 0 && Uz > 0)
which is false. In fact, all your case expressions are false so the otherwise statement always executes.
The fix: Just use an if-else arrangement:
error = -1;
Uz = -1;
if error > 0 && Uz > 0
disp('Controller should not take any action')
elseif error > 0 && Uz < 0
disp('Open the control valve and supply more lifting gas')
elseif error < 0 && Uz < 0
disp('Object losing altitude')
else
disp('other value')
end
