No action perpetrated by the LSF had any direct intention to incite distaste or upheaval of the faction in any way. LSF was clearly carrying out the law in their best interpretation of it. However, any diplomacy regarding the faction will be held as an inRP interaction. What LSF wishes to do in their best interests is up to them based on the events carried out by CR and the LSF in conjunction. It should also be noted that LSF is independent of the Liberty Navy, and acts in the same capacity. If there is a problem with Liberty law, you should have no issues negotiating with Liberty Government to amend those laws.
Before the accusation of ooRP bias, you should deeply consider how the situation was approached. CR was given 7 opportunities to pay and leave without a painful altercation, and there was certainly opportunity for negotiation of the fine. This was a 30 minute interaction, and the opportunity for action was offered and refused. 4 million is so insignificant to most people's wallets, and an arrangement to negotiate the fine could have also been arranged. Should the fine had been found to be drawn in error, you would have been refunded. By refusing to comply you forfeited your right to dispute it, and your vessels in the process.
The law has a lot of room for interpretation, and the flexibility to be altered to obtain an agreement where you're permitted with certain class vessels, but this change has not yet been observed, so assume the law will be carried out how it is written.