Livraria does not mean library, but bookstore. The Livraria Lello where this is located, is definitely a bookshop.
It is not clear to me from the reporting if Manifesto Library is a translation error or if it really is a library within a bookshop.
I suspect it's neither and more like an art installation.
> more like an art installation
Considering the length of the line to get into that place, I'd wager you're correct.
They wrote: > inside the famed Livraria Lello bookshop
So I think they are aware of the “false friends” words.
With that said, I don’t think it’s an actual library, more like, as you said, an art installation, an exhibition, a space for highlighting books.
It's a book store.
> The Livraria Lello where this is located, is definitely a bookshop.
And barely a bookshop at that, more of a tourist attraction. You need tickets to enter, and the main selection of books are classics, mainly public domain iirc. They have more recent/interesting books but only as decoration (I asked to buy a Naomi Klein book, they refused to sell it). Most people are just there to take pictures because the stairs inspired Harry Potter.