Please follow below tips to troubleshoot the issue.
1.Make sure the library is not enabled for Information Rights Management (IRM).
2.Check whether a sensitivity label has already been manually applied to the file.
3.Check whether the file already has a label that's more sensitive than the default label.
4.If you enable EnableSensitivityLabelforPDF after setting the default sensitivity label for the document library, the existing PDF files may not be automatically applied. It is recommended that you delete the existing PDF files and upload them again.
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