Host label is a feature designed to be used in large scale/enterprise environment where server names have a standard naming convention. Typically in an enterprise datacenter, a server has multiple NIC's/IP's and each has its own name and at times, you want to ping/trace them to see if they are reachable. You could save time and instead of typing the names repeatedly, you could take advantage of the host labels.
For example, if you have a server name NYC2451 with 3 IP's. Primary, Backup (bk) and HeartBeat (hb) then instead of typing NYC2451, NYC2451-bk, NYC2541-hb into the Add Host window, you can just type NYC2451 once and check the boxes for -bk & -hb.
Play around with those options to see different effect.
Hope that helps.
Regards,
Brian Dao