Hi @Alexander Auras,
Welcome to the Microsoft Q&A forum.
Thank you for contacting us regarding the issue where the Sensitivity Label appears as a grey placeholder in the top corner of your Team. We appreciate you bringing this to our attention.
After reviewing the details, I can confirm that the label has been successfully applied to the Team. However, the badge in the Teams interface is currently experiencing a display issue. Please note that this does not impact the security policies or permissions enforced by the label; it is purely a UI rendering problem.
This behavior often occurs because Teams has not fully synchronized label metadata from Purview, label configuration causing rendering errors, a UI bug in the New Teams client, or the container label feature not being fully enabled or propagated in the tenant.
I recommend checking the following information. If you don’t have admin permissions, please contact your IT administrator:
1/ Confirm container label feature
- Navigate to Microsoft Purview Compliance portal: https://purview.microsoft.com/.
- Go to Solutions → Information Protection → Labels → Label settings.
- Ensure the option Enable sensitivity labels for Microsoft Teams, Microsoft 365 Groups and SharePoint sites is turned on.
- If not enabled, activate it and allow time for propagation (typically a few hours, up to 24–48 hours).
Alternatively, verify via PowerShell:
Connect-IPPSSession
Set-SPOTenant -EnableAIPIntegration $true
Set-SPOTenant -EnableMIPLabels $true
2/ Check label policy scope
Open the published Label policy and verify:
- Scope includes Groups & Sites (Teams, M365 Groups, SharePoint).
- The affected users are included in the policy assignment.
3/ Validate label display in other locations
- In Teams: Go to Manage Team → Settings → Sensitivity and check if the label name appears correctly.
- On the linked SharePoint site: Verify if the label is displayed in the site header.
4/ Test with a different or new label
- Create a new label with a simple configuration (short name, color assigned).
- Publish it to the same users and apply it to a new Team.
- If the new label displays correctly, the issue is likely with the original label configuration. If not, it may be a UI/service bug.
5/ Network and cache check
- Sign in using InPrivate/Incognito mode or from a different network (e.g., mobile hotspot) to rule out connectivity or browser extension issues.
6/ Verify label assignment via PowerShell
Run the following command to confirm the label is applied at the backend:
Get-UnifiedGroup -Identity "<GroupName>" | Select DisplayName, SensitivityLabel
If the label is correctly assigned, this confirms the issue is UI-related.
You can refer to these articles:
- Use sensitivity labels with Microsoft Teams, Microsoft 365 Groups, and SharePoint sites | Microsoft…
- Sensitivity labels for Microsoft Teams - Microsoft Teams | Microsoft Learn
7/ Contact Microsoft Support
If this issue is urgent and directly impacting your team’s productivity, I strongly recommend reaching out to your IT department and asking them to open a support ticket with Microsoft Technical Support through the Microsoft 365 Admin Center. They have access to system-level diagnostics and can investigate the problem more thoroughly. At the very least, they can provide the most effective workaround to ensure your experience remains smooth and secure.
We kindly ask for your understanding that, as moderators, we do not have access to the administrative tools or permissions required to investigate or modify these configurations. We also do not have the capability to initiate remote sessions for direct assistance. Our role is to guide users to the appropriate resources and support channels.
I hope this information is helpful. Please follow these steps and let me know if it works for you. If not, feel free to share them in the comments on this post so I can continue to assist you.
I look forward to hearing your thoughts on this.
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