Unable to remove Finder color label from file on Mac

Using the contextual menu (right-click on file) I assigned a "Red" label to a file on one of my Macs ("Mac1") (file was on a shared folder). On the other Mac ("Mac2"), using the contextual menu, I was only allowed to ADD another Red label, I could not remove the original Red label. After reading some suggestions, I looked at the file's Info (cmd-I "capital eye") and saw that Mac2 had multiple "Red" labels, and the Finder was assuming that the first "Red" label in the list was the only one available in the contextual menu. Since the two labels are distinct, as far as the Finder is concerned, the original "no-name" Red label could not be removed. SOLUTION: I used the file Info window to remove the named Red label from the file. This eliminated the confusion and allowed me to assign and remove the Red label from files without further problems.

[Re-Titled by Moderator]