Sidechains started as an idea for creating 2-way peg from Bitcoin to an outside new chain. This design was never accomplished and so the "federated" sidechain was born. Unfortunately, in practice this functions very similarly to an altcoin in that the peg is a manual permissioned process enacted by central custodians.

Further, it is not a sound argument to call this a Bitcoin caling layer, as it does not scale itself and it does not deterministically settle to Bitcoin or use Bitcoin transactions to operate.

LBTC is not actually BTC, it is a token controlled by the federation which they currently offer a 1:1 exchange rate when entering and leaving their private network. This could change at any time if they choose.