The saying “labels are for jars not people” means it’s OK to put a description on a jar so you know what’s inside (a label), but it’s not okay to judge people by attaching a label, or description to them, such as "nerd," "jock," or "burnout."
Label is a busy word. It refers to the paper or identifying marks on a jar that tells you something about what’s inside the jar. Put such an identifier on the jar, and you label it. Related to that is a judgment about someone or something, a label. When you call yourself a superstar, you label yourself. Finally, you can use label as a short form of recording label, a company that produces musical recordings.