Link labels are basically various attributes or characteristics added to a site's link profile, on a link-by-link basis. So if page A links to my home page, that page A link can have multiple link labels.
Some of the examples of what labels would be given to a link include footer links, Penguin real time links, disavowed links and so on. In short, algorithms and systems are automatically labeling links with these labels.
And Gary said that Googlers do have access to see what labels are on a specific link. So while Google's manual action team may not get automated flags from algorithms about sites they should investigate - if they are looking at a site and see some link label issues, they may dive deeper and find more issues, he said.
Here is the audio of that interview:
I posted the transcript over here.
Here are some tweets that found this interview interesting:
Fascinating. If the webspam team sees you're disavowing, they know you're actively trying to work on link spam. pic.twitter.com/tdJ9aU5F4F— Marie Haynes (@Marie_Haynes) October 10, 2016
I guess this is why Google says keep using the disavow file to protect your site.
Forum discussion at Twitter.