I'm having labeling issues in ArcMap 10.5 with lines and polygons layers created from a selection, I have not tried to label a selection of points but I'm guessing the issues is the same.
1. I select features for my map and create a layer of my selection.
2. I open the Layer Property window for the new layer that contains the selected features.
3. Under the Label tab I check 'Label features in this layer', change the Label Field and click OK.
4. The window closes and all features from the layer I selected from appear with the label I selected.
Some things I found that need to be noted about this issues/bug:
1. If I create a layer of my selections and on turn on the label but not change the Label Field everything is good to go, the layer of selected features appears as it should with 'default' label. The only work around I have is to create a Shapefile of my selection.
2. I don't have to turn labels on to have this happen, all I have to do is change the Label Field.
3. If I open the attribute table of the layer created from my selection only the selected features are in the table, but after I close the attribute table and go through the steps above all features from the source layer appear.
I'm getting the same behavior. I'm running 10.5.1 on Windows 10. I uninstalled and reinstalled the program, but that didn't fix the issue. In case the original poster's issue isn't totally clear, the problem is that when you apply any change to a layer created by selecting features, the change erases the selection and applies to all of the features in the layer (e.g. if you select 5 of 10 polygons, create a layer, symbolize it (lets say make it green rather than yellow) and then make any change to the labels, all 10 polygons will change. You will have 10 green polygons rather than 5 yellow and 5 green). The only other piece of information that I can add is that changing the placement properties (without even applying the labels) creates the same problem.
Edit: Downgrading to 10.5 solved the problem for me.
I can confirm that this happens with points as well in 10.5.1 for me. That being said, this looks like a relatively old issue, Given Kevin's findings in other threads.
I'm having the exact same issue. As soon as I go to layer properties on a selection layer, and hit OK, I completely lose the selection. This is very annoying. Has anyone found a workaround/fix?
As far as you preserve the selection in parent layer it works fine. even if you change the labeling field it shows only selected labels in selection layer. once you release your selection in parent layer and try to refresh the layer by switching on/off it displays all the features. as both the layers are pointing to same underlying data source it may preserve it until the selection was preserved. I tested it in 10.5, I am not sure how was the behavior in 10.3.