What is a false statement regarding the use of two-layer labels in MPLS VPN?

The statement indicating that labels are solely assigned manually by PE routers is incorrect because, in MPLS VPN configurations, label assignment is commonly done using protocols such as Label Distribution Protocol (LDP), and in some scenarios, it can also be assigned dynamically using Resource Reservation Protocol (RSVP). This allows for more efficient and scalable management of labels, as it reduces the administrative complexity associated with manually assigning labels.

In a two-layer label structure, the outer label typically controls forwarding between provider edge (PE) routers, guiding the packet through the core of the provider's network, while the inner label is used for directing the packet to the correct virtual private network (VPN) destination. Data packets indeed retain both labels during transmission across the network to ensure appropriate routing until they reach their final destination. This layered labeling approach allows for effective isolation and segmentation of traffic within the MPLS environment, enhancing both security and performance.