It’s only cognitive dissonance if you assume all people are equal and deserve equal rights and freedoms.

Correct.

A significant percentage of self-described […] libertarians believe all people are not equal - that there are good people, who will use freedom responsibly, and bad people, who will use their freedom to harm others, and it is the purpose of government (cops, sheriffs, border patrol) to protect the good people from the bad people.

Such an individual would not be a libertarian.

Such […] libertarians wave the thin blue line flag unironically and with complete ideological consistency, because they believe police brutality and oppression will be directed at those who rightfully deserve to be oppressed.

A belief in libertarianism and the display of a Thin Blue Line flag is no longer teetering on, and is now simply cognitive dissonance. They are mutually exclusive.