Labels are typically used on Group and Effect Return sections to indicate what it does. An Effect Return section could have a 'Reverb' label, for example.
The Add Track menu's Label item can be dragged and dropped on a mixer section. A name can be typed immediately after dropping a label, press Enter when done. Labels can be removed by dragging them to the Garbage Bin in the bottom left corner of the window.
The label color can be changed using the rightclick menu. It's convenient to match Group label colors to the tracks that are routed to the Group.