Should it be possible to modify labels? Especially key-value pairs where you might want to extend the possible values.
Related question: Should duplicate labels still be allowed or blocked? Creating a new label, migrating all issues/pulls and deleting the old is an alternative when bulk labeling is possible.
Related:
Modifying as in edit custom label, yes. As labels are referenced by atproto URI, being able to update label name, color and maybe extend allowed values list is possible.
A typical scenario would be to extend the allowed values in a KV-label. Creating a new custom label and is not a valid workaround without an efficient way to update all existing issues/pulls from old to new label.
Absolutely. Extending allowed wouldn't be breaking. Label name and color is cosmetic and might change the intention, which would be problematic combined with #456.
Removing an allowed value is breaking though. If allowed, clients/UIs should also present a "unknown value" icon on issues/pulls referencing the now unsupported value. Not ideal, but considering users can break this directly via atproto, clients/UIs would need to handle it either way. The integrity-risk of decentralized mutable. :)