Microsoft Purview labels that classify and protect content with encryption, watermarks, headers, or footers. The protection travels with the file and can also apply to containers such as SharePoint sites or Teams teams.
In SC-900 you are asked why users don't see a label: it hasn't been published with a label policy. Labels can be applied automatically based on sensitive information types, and downgrading can require a justification.
Sensitivity labels is a concept that can show up on the exam. Check the full guide to see it in context.