Location label is too long

What causes this issue?

&V1& places are available for the functional location label. However,
the label that you entered is &V2& characters long.

How to fix this error?

Check your labeling system.

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.