Setting up Labels to use:

Navigate to Admin > Structure > Categories & Boards
Create or Edit a Board
On the About tab, go down to the Labels section
Add the label(s) that you want to use on that board

Click the Permissions button for each label to set up who can view and who can apply labels

Using Labels:

Labels can now be applied to any thread in the board they were set up on

Labels can be applied / removed by a couple of methods. The first is by going to the Thread List and ticking the checkbox of each thread to affect, clicking the Actions dropdown and mousing over Labels that can be added or removed:

The other method is while you're viewing the thread. Click the Actions dropdown and mouse over Labels to see the labels that can be added or removed:

This label help guide was created by PB member @msg Thank you!