“…organisms with complex nervous systems appear to have evolved a gating mechanism that allows them to cease responding to stimuli with no apparent motivational or emotional value. Novel stimuli automatically attract attention.” Peterson, Smith, & Carson, S. (2002), p. 1137
How does something lose its novelty or value so that it ceases to capture our attention? One way is through repeated exposure without consequence. Another is through classification as something old and inconsequential.
Labeling thoughts and feelings makes them feel old hat. Labeling can be an efficient shortcut to habituation - the attenuation of response with repeated exposure. Labeling makes it easier to let go because its breaks the hold of novelty (or the seeming novel).
Something feels novel when we experience it as unique and detailed. Novelty is an experience of particulars: particular people, particular actions, particular events. Labeling subsumes specificity under an overarching category.
Labeling can be the result of experience - repeated exposure to what was once novel. "Oh, I'm being a 'martyr' again." Or labeling can replace experience - preempt experience before it plays itself out, before the drama sets in.
The urge to label hovers before the stream of consciousness, ready to take the wind out of its sails. Of course, the weather's always changing and the wind often comes out of nowhere.
Peterson, J. B., Smith, K. W., & Carson, S. (2002). Openness and Extraversion are associated with reduced latent inhibition: Replication and commentary. Personality and Individual Differences, 33, 1137–1147.