Yes – because the “replacement” is not a “substitution” and vice versa. Rules 15.3.2, 19.3.2, 19.3.2.8
If this was the first occurrence in the match, the 1st referee should allow the rally to continue uninterrupted. After the rally, he/she should advise the game captain that this is not a correct procedure. Subsequent late replacements should trigger delay sanctions immediately, interrupting the rally. The Libero replacement remains valid, however.
If the replacement has been made after the service hit, the 1st referee should whistle this as a positional fault. Rule 19.3.2.5
The Libero has no right to take part either by legal, or exceptional substitution. Therefore, the substitution request should be considered as an illegal one. Because this was discovered before the game resumed, the request should be denied and a delay sanction should be issued for the faulty team. The Libero has to change his/her shirt, however. The referees should control carefully the teams and the players’ uniform comparing the players and shirt numbers before the match in due time in order to avoid such a situation. Rule 15.5.1, 15.7, 16.1.3, 19.2
Based on the approach of the rule, if the Libero’s action is done with opened fingers like a classical, intentional set, it is considered as a fault. However, if the Libero protects the body/face instead of setting, it should be a legal play. Rule 13.3.6.,19.3.1.4