No, you wouldn’t release them to the wild anymore than you would a dog or cat. You are absolutely right that they have been domesticated to the point in the imperial core where that is infeasible. Sanctuaries would require further land, but spreading out the impact would actually be less harmful for the environment on the whole.

You could convert currently empty urban spaces into sanctuaries as a part of ecological renewal programs. There are a lot of very sustainable ways we can handle animal liberation.

Animals do not produce milk passively and egg laying animals lay far less eggs when those eggs are not taken from them daily. So much of this comes down to compassionately managing the remaining generations of these animals and could be achieved in a relatively short timespan.

On the whole I do believe there are ways for us to coexist with many animals which have been domesticated such as dogs and cats. That would require a total revamp of how we approach this. This last take has mixed support in vegan circles because of how fucked up the capitalist machine around dogs and cats is.