Auto labeling - Data at rest

Hi Team,

According to this article, the sensitive information types we select will apply only to content created or modified after these sensitive information types are created or modified. This instruction applies to all custom sensitive information types and any built-in sensitive information types.

Automatically apply a sensitivity label in Microsoft 365 | Microsoft Learn

I am trying to understand if it is for data at rest then this will not help to scan and classify data at rest in sharepoint and onedrive. Please let me know if I am misreading this article or if is it  an actual limitation?

Thank you