Users need the ability to set labels on the HostedCluster in order to influence how MCE installs addons into that cluster.

In MCE, when a HostedCluster is created, MCE imports that cluster as a ManagedCluster. MCE has the ability to install addons into ManagedClusters by matching a managedCluster to an install strategy using label selectors. During the import process of importing a HostedCluster as a ManagedCluster, MCE now syncs the labels from the HostedCluster to the ManagedCluster.

This means by being able to set the labels on the HostedCluster, someone can now influence what addons are installed by MCE into that cluster.