What is the purpose of labels in the project panel?

Labels in the project panel serve the crucial purpose of providing color coding for organizational purposes. This feature allows users to visually categorize and prioritize their clips, making it easier to navigate through a project, especially when dealing with a large number of assets. By assigning different colors to various clips, users can quickly identify groups of related files, differentiate between types of media, or mark items according to their status (for instance, completed or requiring review). This enhances workflow efficiency as it streamlines asset management, allowing for a more organized approach to editing and production.