You cannot manage labels centrally, it can only be done via issues. For example if you need to rename one you would have do a JQL to select all issues with the label, bulk edit them and add the new label, then bulk edit again to remove the old label.
Does that mean that once a developer adds a new Label to the list, it can not be removed, or edited? Maybe I am not reading this right, but that seems like an over site! I understand that an issues label can be changed, but if someone adds an offensive, or incorrect Label to the available list, then it's stuck in that list for good...
Run a query to find all the Issues across your entire jira instance with that label. Then you have to either do a bulk update to remove (but this will remove ALL labels). Or go through one by one and remove it.
If the label exist on a single issue in Jira it will show in the dropdown.
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