Create your own Label sets that make sense to you and your workflow. You can have as many Label sets as you like and assign them to specific folders.
Add Label set
Go to Admin > Labels.
Next, click the Add Label set icon on the actions toolbar. Enter a name for your new Label set and click Create. The Label set is now created, and you can customize it with text and colors to fit your usage.
Edit Label Set
Go to Admin > Labels. Next, click on the specific labels to edit color and names on the labels.
Assign Label set to a folder
You can always choose another Labelset if you do not want to use the inherited Labelset from a parent folder. To do so just navigate to the folder you want to assign a Label set to, click on Advanced settings in the Sidebar, and select another Labelset from the Labelset drop-down menu.
Enable/disable label change on folder level
You can easily enable or disable label changes on the folder level. Enter the folder you want to modify, click on Advanced settings in the Sidebar, and you can now enable/disable label changes for this folder (and subfolders) from the Label Change drop-down menu.