This is an interesting one, normally, if you remove all spaces from a category, the category will no longer appear in the Space Directory.
The following documentation describes how to add but also how to remove them: https://confluence.atlassian.com/confcloud/use-labels-to-categorize-spaces-724764814.html
If the label still appears it may be worth viewing this similar question in the community for more info: https://community.atlassian.com/t5/Confluence-questions/How-do-you-delete-unused-label-in-Confluence-cloud/qaq-p/1164881
- Here it details that there is a bug (Status: Gathering Impact) where labels not being used anymore still show on Labels list macro (CONFCLOUD-58953)
Hope this helps!
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