For optimal control of diffusions under several criteria, due to computational or analytical reasons, many studies have a apriori assumed control policies to be Lipschitz or smooth, often with no rigorous analysis on whether this restriction entails loss. While optimality of Markov/stationary Markov policies for expected finite horizon/infinite horizon (discounted/ergodic) cost and cost-up-to-exit time optimal control problems can be established under certain technical conditions, an optimal solution is typically …