What you're saying is repeated constantly through this discussion, but it's very misleading. There is a border dispute and that land is a part of the dispute.

Another reading of the situation is that Serbia can claim that the land is a part of Croatia because they've allowed people to inhabit it and it's contagious to Croatian land, given that 'Liberland' has no legal basis.

Given that Croatia has no good options here, they've chosen the least harmful option.

It doesn't seem like the "Liberland" people have any claim to the territory, but I don't think that makes my point misleading.

If Croatia says the territory belongs to Serbia, then Croatia has no business sending police there outside of very narrow circumstances such as people there launching attacks into territory Croatia does claim. On the other hand, Croatia would probably be within its rights to enforce a border with this territory, as would Serbia. That would rapidly become unpleasant for anyone trying to live there.

The Liberland people are exactly claiming the land, that's the whole point of what they're doing.

Croatia, even if it claims the land is Serbia, consistent with its border claim, it still administers it as a practical matter, that includes keeping people out of where they shouldn't be.