You have the symptom right, but your diagnosis is wrong. The coddling of Islam has nothing to do with “separation of church and state” and everything to do with cowering of morally weak individuals in the face blatant intimidation.
This is not the fault of “Libertarians” but is the fault of all those, left or right, who think it is the business of government to interfere with individual rights in the name of “tolerance” or “security” or “fairness” or “safety” or whatever fig leaf they are using on the day.
Your right.