I like this, but I don't know if the naming of the option is clear enough "Use labels as placeholders", perhaps it is worth to add a description saying "labels will be hidden and the content of the label will be shown as placeholder".
Moreover it would be nice (but I don't know if that's possible), that when the option is checked the preview of the form changes to reflect the made option, this way the end user can understand the option better.
agree