I was just talking with my wife about this! As I remembered (and it's been oh 18 years since I read him) for Bahktin, ever the marxist, the Carnival's temporary inversion of the established social order functions as a sort of safety valve for society. A steam whistle, that blows down tensions and as a result prevents class warfare from becoming open warfare. And so ultimately the "subversion" of the Carnival ends up reinforcing existing social and economic power structures by preventing meaningful change or outright proletarian revolution.

When the police pulled out and allowed the CHOP to do its Carnival thing, it's just a way to let The People vent, to feel like change is possible, like anything is possible, before the tiresome reality of an endless street party eventually implodes the moment and things go back to 'Normal'. With a reference to Hakim Bey, it's why Temporary Autonomous Zone are temporary. Like Fiume after WWI, or Burning Man, or pirate utopias, or Occupy Wallstreet; as a reaction to a system that ultimately subverts them, they cannot last forever. But there's amazing times to be had, freedoms to experience, before that happens.