The presiding minister may conduct the Confession and Absolution from outside the chancel.
INTROIT, PSALM, or ENTRANCE HYMN
The presiding minister and his assistants may enter the chancel.
These two "may" rubrics are common to all the five Divine Service Settings of LSB.
There is a truth contained here that is wonderful to mark: the confession and absolution are preparation, not actually a part of the service itself. The service proper begins with the entrance of the presiding ministers and assistants into the chancel at some point during the singing of the Introit, Psalm or Entrance Hymn. Why? Because we literally "enter His gates with thanksgiving and His courts with praise!" (Psalm 100:4) The movement of the clergy to the altar manifests that in the Divine Liturgy and the songs we offer therein, we have come into the Holy of Holies and offer our praises before the throne of God and the Lamb in the power of the Holy Spirit.