Label &1 is already being used in labeling system &3

What causes this issue?

You want to create a <GL:functional_location>functional location</>
with the label &V1& in labeling system &V2&, or you want to assign this
label to an existing location. However, this label is already being
used in labeling system &V3& by location &V4&. Moreover, it has been
set in Customizing that at least one of the two labeling systems
requires uniques labels.

System Response

The system can not assign the label &V1& in labeling system &V2& a
second time.

How to fix this error?

Assign a label that does not already exist in this or in any other
labeling system.
If you are sure that you want to assign this label a second time, check
your labeling system in Customizing. If necessary, cancel the setting
that at least one of the labeling systems must be unique.

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.