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Whether he believes his posters or not is irrelevant.
He's using this as a moneymaking scheme.
Lay one finger on him, do one thing that violates him, and he will sue you, and more importantly, the city, the police department, the US Military, and any private property owner he happens to be standing on to make money off of it.
The most telling tale about all of Phelp's behavior is the schedule he keeps, and the company he keeps as well. The parties sometimes split up and go to two separate state funerals to maximize the profitability of them. There are, at maximum, twelve members to the party. They never stay more than thirty minutes (I assume they realize that someone will do something to them the MOMENT they come out of the vans, and really, after that, they get their camera shots to cause the outrage for the next stop, and then they move on) to maximize their profits, because time is money, and really, they're not interested in the message, because they're just interested in the lawsuit.
So basically the intent should be to make sure they don't have any grounds for suing anyone.