...What made me think it could be PM is when I ingest directly to the Cap One Capture folder I do not get a colour tag.
1 Start C1 (keep PM closed)
2 Set (or observe) a yellow label on an image in C1
3 Make C1 write metadata to a sidecar xmp (Metadata tool (the "i") -> three dot menu -> Sync Metadata)
4 Open the sidecar file in a text editor and find <xmp:Label>Yellow</xmp:Label>
5 Close text editor, close C1.
6 Start PM and navigate to image. Observe yellow label (expected)
7 Make PM cange label from yellow to blue
8 Close PM
9 Open the sidcar file in the text editor and find xmp:Label="Blue"
10 Close text editor
11 Start C1
12 If C1 shows yellow label (My C1 must do that) then
13 Make C1 reload metadata (Metadata tool-> three dot menu -> Reload Metadata)
14 C1 should present the blue label
You may have to experiment a little with your C1 Preferences.
Some people like to run C1 with "Auto Sync Sidecar XMP" set to "Full Sync" in contrast to my "None" setting (see attached screen snippet). Full sync can be a resource hog, but it will automate the important steps in the above.
I do all metadata work in PM+, but I occasionally want to see updated metadata in C1. In C1 browser I do Ctrl + A (select all, in Windows), then Metadata tool -> three dot menu -> Reload Metadata. I have practiced this since more or less continuously since C1 v7
Once you get the steps outlined above to work, you can start tuning preferences to your liking, preferring one metadata source over another, doing auto sync or auto reload or both (full sync).
My C1 (v20) Preferences are as shown in the attached image.
Edited to add: Metadata tool operates on selected image, click on the thumbnail before executing steps 3 and 13.