Cannot find sensitivity label Confidential - Internal Employee

Hello and thanks for reaching out. 

Sometimes this may mean that the label is being auto‑applied by an Exchange or Purview auto‑labeling policy (service‑side or client‑side), even if you don’t see it listed as a SIT or manual rule—check Purview → Information Protection → Auto‑labeling policies and run the policy in simulation mode first to confirm the condition and avoid user disruption. Automatically apply a sensitivity label to Microsoft 365 data | Microsoft Learn
Once done, verify that the label exists and it is published - I believe the built-in diagnostic should be able to surface it. 
Sensitivity labels are missing - Microsoft 365 | Microsoft Learn