Labour branch in Jeremy Hunt's seat in Surrey are considering standing down as well, but IMHO this should be so that they can get behind the NHS Action candidate who got 10% last time, rather than the Lib Dems, of course there's precedent for the LibDems backing that party's forerunners in Kidderminster in 2001, not that Labour would like to be reminded of that.
IIRC the dismal Lib Dem performance in SW Surrey was due to the Lib Dems disavowing their own candidate due to some probable fraud and telling their own voters to vote for NHA candidate. Presumably they will support their own candidate this time as this is a place they used to be competitive.