The correct option is Enable sensitivity label support for Teams Microsoft 365 groups and SharePoint sites.

This setting is a tenant level capability that must be turned on before sensitivity labels can be applied to Microsoft 365 groups, Teams, and SharePoint sites. Once Enable sensitivity label support for Teams Microsoft 365 groups and SharePoint sites is enabled you can publish labels that enforce protection and change site privacy and guest access settings to limit who can access the site.

Microsoft Purview compliance portal is where you go to configure sensitivity labels and other compliance features but it is not the specific capability you must activate. The portal is the management location rather than the individual setting that enables site labeling.

Autolabeling policies for SharePoint are used to automatically apply labels to content based on conditions and content inspection. Autolabeling helps classify and protect files but it does not enable the site level labeling capability that controls site privacy and guest access.

Azure Information Protection unified labeling client refers to an older client side solution for applying labels to files. This approach does not enable the tenant level site labeling feature and it is less relevant on newer exams because Microsoft has consolidated labeling into the Microsoft Purview information protection framework.

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