I'm working with CR2 files.
I think PM can use the same settings as for Lightroom with respect to where to write and read color label and star rating information, essentially you make use of XMP sidecar file. DNG is different because C1 exchanges metadata embedded in the raw (DNG) file. I attach 4 screenshots from my Windows PC with settings that work for me. I use C1 exclusively in Session mode, no C1 Catalog for me.
Note the C1 preferences for Metadata where Auto Sync sidecar XMP is set to None and the two prefer-xmp checkboxes are checked. Since Auto Sync is set off, I must trigger metadata exhange manually using the three-dot-menu in C1, Reload if I want C1 to read metadata from PM, Sync if I want C1 to write metadata for PM to pick up. I rarely do the last version, I stick to PM for working with metadata.
Hope this helps and that my screenshots make it through the wires.