Two people can label the same situation differently which leads to different perceptions. A bad experience could be labelled as a trauma and can lead to several psychiatric disorders like PTSD or depression. Often when we label something we also generalize a situation or a person. Labeling someone in this way can lead other people to oppress that person or take their advantage. For example a label like HIV positive is generally taken in a negative sense by people and it overshadows all other aspects of a person's life.
