Paragraphs don't need a label, but custom blocks placed in layout builder do. Since you're not always displaying the label this can be an extra step in composing content. This module just sets it automatically and hides the field.
It has a global impact, so if you were using the title for one of your custom blocks, you'll have to create a field to display instead.
I'm wondering if this will be unnecessary after auto_entitylabel supports layout builder: https://www.drupal.org/project/auto_entitylabel/issues/3065687
Stability
Alpha