Can you give us a few more parameters, and perhaps an example of how you are using this? Is simply copying the item selected in Launchbar and pasting it at the current insertion point not adequate (e.g.: Trigger LB, Copy, Escape, Paste — all by Type a Keystroke Actions in KM)?
Note that in your example the Front Window will likely be the LB bezel. I’m not sure of the terminology or the function, but triggering LB by its hotkey does not make LB the active application, which is why I suggest getting the currently selected item in LB that way. If your “LaunchBar Group” in KM is set to work only when LB is active, then the macro won’t work the way you intend (afaik). Have you tried your macro with it in your “Global Macro Group”?
Note, too, that a better way to show/share macros here is to select all the Actions, right-click one of them, “Copy as Image”, and paste into the forum message editor. You can also use the built-in functions available via the OS “Share” icon in the KM toolbar.