The UK is like America right now, it's very polarized over Brexit so as a result people aren't willing to vote for third parties right now. Plus, I think the type over voter who would want to vote LibDem still haven't forgiven the party for entering coaltion with the Tories.
Yes, but with Corbyn clearly Eurosceptic even if most of LAB are not, you would think that middle class liberal-progressive pro-Euro votes should migrate to LibDem in polling even if they might tactically vote LAB election day.
Brexit isn't the only issue in Britain at the moment. While many Labour voters may prefer the Lib Dems' approach on Brexit, they prefer Labour's views on most other issues.