Basically anarchy only works if everyone is a decent and good person that is willing to cooperate with others. In other words, it can work on a small scale but the more people you have the more likely you are to have some jerk in the mix and that screws up the entire system.

In the above situation, there is two obvious solutions to the problem. The person turns down his music because he realizes he is bothering others. The people living near him move away. Again that requires the first person respecting others right to have some peace, or other people respecting his right to be annoying and finding an alternative such as moving, or accepting it.

Maybe person A plays his musics too loud but person B likes to walk around the streets naked. If he is willing to live with sound muffling headphones so the music no longer bothers him, in exchange for the ability of others to look the other way while he walks around town naked, everyone gets along. Everyone needs to be very mature though, and willing to put up with stuff to get what you want at times. There are people today, who would probably live just fine in such communities, but humans in general are not ready for such communities. We need to mature more as a race before we can work together like that without any rules.