Hi Ankur, htyagi,
This is actually the current behaviour of JIRA Capture.
Although the labels are not fetched, if you enter the existing label names in the field, then the issue will reference those labels once it is created.
I have seen that htyagi has created the issue below for this:
I would recommend you to vote on that issue to increase its visibility with development and also to add yourself as a watcher to be notified of any future upgrade from the Atlassian Development team on that issue.
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