A liquor license is a privilege, not a right under Maryland law. Maybe they should check Webster's dictionary. Licenses issued under Maryland's alcoholic beverages code are no different, burdened by rules binding the licensee. Some rules apply statewide, others to specific jurisdictions. All have been passed by Maryland's legislature, even those for home rule counties.
Any violation is a violation of state law.
The code's section governing lewd and indecent acts on the premises of licensed establishments apply in 16 of 24 Maryland subdivisions. Local boards have no leeway in enforcement of this section. The prohibited act list, including simulations, is finite, down to physical features. The Frederick County Liquor Board had no choice after a hearing showed Xhale in violation. It revoked the liquor license.