Issues with default encrypted label, external emails, and label persistence in Outlook

Hello everyone,

I’m currently running a pilot for Microsoft Purview Sensitivity Labels and would appreciate guidance or best-practice recommendations.

Current setup

I have created four sensitivity labels:

Internal (default label – encrypted)

Public (not encrypted, allowed for external sharing)

Confidential

Client PII

For the pilot:

Internal is configured as the default label

The Internal label is encrypted

External emails should be sent only using the Public label

Issue 1 – No prompt when sending externally

When a user composes an email, it defaults to Internal (encrypted).

If they add an external recipient, Outlook does not prompt the user to review or change the label.

As a result:

Users can unintentionally send encrypted emails externally

Users must manually remember to switch from Internal → Public

Question:

Is there a way in Purview / Outlook to prompt or warn users (popup, banner, or dialog) when sending emails externally, asking them to confirm or change the sensitivity label before sending?

Issue 2 – Label not consistently retained in the same email thread

Even when users manually select the Public label for an external email:

On replies within the same email thread, users often have to manually reselect the Public label again

However, this behavior is inconsistent

In some cases, the same label is retained for the entire thread

In other cases, it reverts back to the default Internal label

This inconsistency makes it difficult to explain expected behavior to users and increases the risk of mistakes.

Questions:

What is the expected behavior for label inheritance in Outlook email threads?

What factors affect whether a label is retained or reset (e.g., Outlook version, new compose vs reply, internal vs external recipient detection)?

Is there any supported way to force label persistence across the same email conversation?

My objective is to:

Keep Internal as the default label

Ensure users are clearly guided when sending emails externally

Reduce manual relabeling for the same external email threads

Avoid user confusion during day-to-day email usage

Any insights, configuration guidance, or Microsoft-recommended patterns would be greatly appreciated.