Hi SmokedLargeMeat,
I got an update on the label maker issue. The label maker cannot be used in Multiplayer due to restrictions around messaging in games and the potential to sent offensive messages. I have asked the team to change the notification in some way to make this clearer for players to prevent further misunderstanding.
I also created a known issue post here as I know in it’s current state it looks like an issue (I assumed it was too) - [Known Issue][PS4/XB1] Label maker not working in multiplayer