Who protects that freedom ? Suppose i own the police, because they are of course privatized and owned by unelected entities (me). I can tell them to arrest you or whatever just because I feel like it. Because there is no state providing justice, if you are not yourself powerful or well liked, I don't see where you'd get any recourse. Someone else can easily give you the only choice of indentured servitude for protection and this is not at all a novel pattern in human societies, it goes on all the time.
A core weakness in libertarianism is the cornerstone assumption that everyone will play by the rules, and offers no remedy for those that violate those rules. Which pretty much ignores human behavior going through history (and personal experience, for anyone who has had to do a group assignment).
Yes. Any time there is a power vacuum, there are strongmen waiting to step in and grab that power. As terrible as democracy is, we haven't yet invented anything better to keep the strongmen at bay. So the libertarians will have to live under the rules that society dictates, and here we are.