Sensitivity label
A tag applied to a document or email that carries protection with it, such as encryption or access restrictions.
Unlike a simple marking, a label enforces. A file labeled confidential can be encrypted so that only named people can open it, regardless of where the file travels or who ends up with a copy.
Labels can be applied by users or automatically based on content inspection. Automatic labeling is the more reliable of the two at scale, but it needs Purview Suite licensing and a period of tuning.
Where this comes up
Sensitivity label sits inside our microsoft 365 and cloud work. If you are trying to work out what this means for your own environment rather than in the abstract, that is the page worth reading next, and a short call will get you a straight answer faster than either.