It was in the heat of the rally just trying to get the shuttle, not in anger after loosing the point. I think theoretically umpire can give a yellow card, but probably verbal warning should be enough here. LD did apologize to the umpire showing he understands that it was wrong.
Here is in example with Hu Yun in Thailand masters where he should have given a yellow card. https://www.youtube.com/watch?v=Z2Ek0e-1PMU&t=49m3s It was in anger and also he endangered a line judge.
I concur with @strarider - Lin Dan is not endangering anyone, not running afoul of Players' Code of Conduct §4.14, and he throws the racket during and not after the rally. Therefore, while I think a short reprimand may be in order, I'd just go on with the match.
now can someone cite the Law if LD were to have knocked the shuttlecock out of bound while not under his possession?
What do you mean? I am unaware of either of the terms out of bound or possession in the official laws. Sorry, I'm not a native speaker - what do you mean with these terms?
It was definitely done in jest and not in anger. The crowd certainly got the joke. All that was warranted from the umpire was maybe a warning with a smile.
Lin Dan apologised to the umpire straight afterwards, knowing how strict badminton laws are on players actually trying to entertain and have a bit of fun on court. Umpire called it just right and smiled along with the rest of the crowd. Job done. A light-hearted moment to liven up a one-sided final.
Law 13.3.9 It shall be a 'fault' if in play, the shuttle touches a player's racket and does not travel towards the opponent's court would cover the shuttle being knocked out of bounds but I think the question is more what if the shuttle did go over the net as a result of it hitting a thrown racket? I can't find anything in the rules nor in the RTTO other than in the RTTO the only mentioned of a thrown racket is in a situation where the thrown racket was directed into the opponent's court (considered a fault for distraction).
