I personally never use labelling in Java and I rarely see it used. To me it feels like a primitive feature that I'd use back with asm compilers. I think it is good programming practice to avoid constructs that resemble GOTO. Code with GOTOs are generally harder to follow.
Most of the time, I use break and continue without labels. I think the only example of code that I can remember in recent memory that could have benefitted from labels for an parameter-search/optimization problem similar to the basic artificial intelligence algorithm A-Star. Oh actually... I wrote some C code to do with cache tiling optimizations in the processor that might have benefitted from labels, but usually these are exceptions to the rule.
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