Peasants were bound to their lord's land, owed feudal dues like corvée, and could be judged and punished by their lord. It could only be called an era of "political liberty" for perhaps a relatively small class of nobility. The vast majority of the population was trapped in cemented, unalterable relations of fealty and economic exploitation.
> It was a reaction against the centralization and coercion of the old Roman Empire.
It wasn't so much a reaction against anything in the Roman Empire as the thing that sprang up as the more politically and economically advanced Roman system collapsed. Roman citizens had political rights, such as protection from arbitrary punishment, which were lost in the feudal era. The Roman state collected taxes and used them to provide substantial public goods, such as roads, aqueducts, sewage systems, public baths and theaters, the grain dole, courts and of course, defense of the frontiers against barbarian incursion. With the collapse of that system, the Latin-speaking population of Western Europe came under the rule of rather uncooth German tribesmen. The only honorable professions open to the Roman aristocracy, which previously would have gone into the civil service, were in the Church and the meagre administrations of the new German kingdoms. Taxation systems broke down, the previous public goods were no longer provided, and the common population came under the personal rule of their lords.
I wouldn't call a system in which the common population is subjected to the personal rule of a lord more "free" than a system of laws.