This setting behaves differently for email messages and documents. Email Users won't be able to send messages that have this ...

This setting behaves differently for email messages and documents.​
Email
Users won't be able to send messages that have this label applied to people inside or outside your organization.​
 Documents
Users won't be able to share documents that have this label applied with anyone. Also, any documents that were previously shared but now have this label applied will be inaccessible to anyone except the content owner, the last modifier, and the site admin.​​