The velvet looks antique and right for a 100 year old garment. It looks exactly like the antique silk velvet found on hats from the same time period. I cannot tell of course if it has been altered. To add to the mystery, could Liberty possibly be the name of the character in a theatrical production? I have come across a few antique garments with names of literary characters sewn in, often hand written on a tag which is sewn in, or on occasion the name is embroidered right onto the lining of the garment.
While I have only personally handled about 1 dozen actual Liberty garments, and have seen quite a number in books and museums, I do have several in my own collection dating from 1880 to 1910s and with with a variety of labels, and I have never seen anything like this. Interesting!