It is nonsensical to think that labels are "bad". Still, mislabeling truly is bad.
I am "white". I am "male". I am "married". I am "heterosexual". I am a "father". I am a "citizen". I am a "Texan". I am a university "Alumni". I am an "Entrepreneur". I am a "Brazosport Exporter". I am a "Christian". These labels are "Facts" that tell you much about me; they are "Good".
Some labels are false and lead to disappointment, anger, violence, and even worse; so, false labels are bad. False labels can also be funny, such is the case with satire. Laughter is good for the soul. False labels can be good or bad.
Some labels are "ambiguous"; they require "judgement". These labels are not factual, and they are neither good nor bad: I am "funny". I am "smart". I am "ambitious". I am "open minded". I am "happy". I am "nice". Believe It or Not!
Within cycles of learning, everyone uses life experiences to assess "facts" and "feelings". Everyone uses labels to make predictions about the future. Everyone.
Consistently applying the correct labels for the "good" of "mankind" requires "learning", so always wear your learning hat. And, always do the right thing.
