A label tree item with children expands if the user clicks either on the colored dot or the empty area next to the label name. If the user clicks on the label name the label is selected and not expanded.
Maybe this behavior becomes more transparent if we implement a new hover style: If the user hovers over the colored dot or the empty area next to the label name the colored dot becomes an arrow pointing down. The same goes for collapsing the label item with an arrow pointing up. If the user hovers over the label name the colored dot doesn't change.
mzur
commented
7 years ago 
A label tree item with children expands if the user clicks either on the colored dot or the empty area next to the label name. If the user clicks on the label name the label is selected and not expanded.
Maybe this behavior becomes more transparent if we implement a new hover style: If the user hovers over the colored dot or the empty area next to the label name the colored dot becomes an arrow pointing down. The same goes for collapsing the label item with an arrow pointing up. If the user hovers over the label name the colored dot doesn't change.