Paste Link or Embed Object an encrypted/protected document (Sensitivity Label) causes error.

We are using Microsoft Purview's Built-In Labeling and have defined sensitivity labels.  We are noticing that if the excel (or word) document is encrypted/protected with sensitivity labels, they can not be paste linked or embedded into another document (PowerPoint, etc).   2 Behaviors outlined:

1) Insert -> Object -> Create From File will produce an error : Files with restricted permission cannot be inserted into this presentation

or

2) If you attempt to paste link to encrypted document (ex. excel), the option to paste link to Microsoft Excel Worksheet Object is missing.  The only option is a hyperlink.  

A nuance - in a situation where excel was not labeled and paste linked into a PowerPoint, if the excel was later encrypted/protected, the link stays in place.  That is, if you update the excel, it will update Power point (example)

The error seems to only occur if the excel is encrypted/protected prior to be paste linked.  

Has anyone experienced this and is there a fix?