I've unearthed my set of boot disks. These were supplied with a Brother PC long ago, and have a Brother label on them, but the content seems standard.
They are 3 DSDD disks.
They have a label set on each disk, the first is 'DISK 1', in other words the label is 11 chars long, which is I think the max length, and there are 6 spaces between DISK and the digit. The three disks are numbered 1, 2 and 3 respectively.
It seems to be OK to use the LABEL command in the form: label a:DISK 1 as spaces are explicitly allowed.
The LABEL command is on disk 3 of my set, and is compressed as LABEL.EX_.
Having loaded the system, the first disk then proceeds to AUTOEXEC.BAT, this is a small file and ends by starting SETUP.EXE, which does all of the work of installing etc. The message you report has come from SETUP.EXE, so the fact that it's got to that point indicates that all is well, apart from the disk label!
The SETUP I have suggests options to use the initial disks to create a 'working' set of boot disks, or to install the system to the HD, and to format the HD as well, incl putting the system files onto the HD.
Geoff