It's not absurd. We have a history in this country of certain states not prosecuting lynchings of blacks. The federal government has historically had to step in if there was going to be justice in these cases. Here again, we have a murder of young black man, where the murderer was going to walk away. Until the feds stepped in. Historically, state's rights, which as you point out, Libertarians support, has been used to defend against the feds stepping in. STY is using that very argument right here on this thread. Now, whether or not Libertarians support the actions of the police department, is irrelevant. Do they support the "right" of the local authorities to clear this man and not face federal scrutiny? That is the only thing that matters. You are very hung up on intent - what do libertarians and state's rights folks "intend". Well, that irrelevant. First of all, you all intend different things. What is relevant is the actual impact of your policies on others.
Who is "in charge" of the city has absolutely nothing to do with this. I am pretty sure you are the only one who thinks it does.