The inherent problem with freedom in a society is when one person's exercise of their freedom takes away from another person's freedom. Absolute freedom only exists in a society of one person (and, by extension: the more people we have in a resource/space constrained society, the less free we all must be to share the common resources and space.)
If you don't "get rid" of the problematic - what's your option? Just shrug and ignore them when they rape, murder, pillage and destroy? If you "rehabilitate" the problematic, how is that respecting their freedom?
Back in "the Australia Project" (Manna story) - the development of the overall project was kind of vague, but implied access to a lot more "space" in which people could choose to live with others in ways that each group chose to be "acceptable society." If you are more at home in one society than another, you are free to migrate. If a particular society chose to cap its size at 200, or 2000, or however many members, you were free to organize another modeled on it... The key aspect of behavior was: respect. Whatever the size of your social interaction: 2 million down to 2 people - respect the others in that society within the boundaries of local societal norms. The availability of virtual reality expanded the available "living space" many orders of magnitude.