Hi Pravin,
The point to be noted that if the alternative labeling is activated then the FL label can be altered easily.
As FL is critical master data therefore there should be a proper authorization checks that whom should be allowed to change the label of FL.
Second unique indicator should be set then system checks in the selected labeling system when a functional location label is created, to see whether this label already exists in one of the other labeling systems. If the label does already exist, you cannot create the functional location with this label.Like this you can reuse the old label within changed functional location if required.
If the indicator is not set, the label only has to be unique within the selected labeling systems.
Regards
Naveen