I don’t think PaperUI will work properly with .items file defined Items. PaperUI is intended to be an admin UI, not a day-to-day user’s interface. I’m not surprised that it doesn’t show the label properly. I’ve less experience with Habmin and I do know that others are using it as an user’s interface but it too is kind of intended to be more of an admin UI.
What does it look like with BasicUI, ClassicUI, or HABpanel? Those are your user’s interfaces (in addition to the phone apps).
I assumed you were using one of these UIs and having problems.