Labels not found on existing cases when created using a create issue screen

Problem

User not able to see the LABELS created on create issue screen.

Environment

Company managed
.

Steps to Reproduce

create a new issue and create labels on this create issue screen.
Now try to use them on the existing cases on the project. It comes as a new label
Create a new case again and try to add these labels when creating this new issue. The labels are available while typing it( clicking it outside gives the label once typed in, without creating it( clicking on the new Label).

Expected Results

Newly created labels should be available

Actual Results

Not available under the dropdown for the customer to select

Workaround

Notes

This puts customers in great difficulty as they believe the labels are not created and they create it again and shows inconsistency.
The created labels are not available for customers to select