There are some issues with the context menu of the label widget:

Single label selected
Rename - Will always rename the first label in the layer
Merge - Will always merge the target into the first label in the layer

Several labels selected
Remove - Erases the content but does not remove the labels themselves
Combine and create surface - Does not work
Create mask for each label - Does not work
Combine and create mask - Does not work

Additionally several of the actions do not update the rendering/list afterwards