Hello Martin
That’s a good point! It’s important to understand which label is being referred to in each case. From the point of view or PE1, 24 is the local label, which is the label that the local router itself assigns to this prefix. Label 26 is the label assigned by the next hop router. But which is the next hop router? In this case, it is actually the tail end router, or the other end of the tunnel, which is PE2 because we are using LSP tunnels. This is why you only see one label in the traceroute, and not a label for every hop.
If you take a look at the output from the show mpls forwarding-table 7.7.7.7 detail command, you’ll actually see both labeles referenced:
PE1#show mpls forwarding-table 7.7.7.7 detail
Local Outgoing Prefix Bytes Label Outgoing Next Hop
Label Label or Tunnel Id Switched interface
24 Pop Label 7.7.7.7/32 0 Tu1 point2point
MAC/Encaps=14/18, MRU=1500, Label Stack{26}, via Gi0/1
5254001A70435254001F16328847 0001A000
No output feature configured
The local label is 24, but the value you see in the Label Stack is 26. This is the label being pushed onto the packet before being forwarded. Does that make sense?
I hope this has been helpful!
Laz