Azure: MIP Policies on local clients

Question

Hi. I have an office 365 E3 test license to test all different cases of labelling, policies, checking the MIP SDK etc. I dont use the AIP client(s), I just want to use integrated functions of the 365 office clients as well as of the 365 web apps. It all works very well so far, except one thing:
I have a policy that allows User A to add a label C. I have another policy that allows all users A, B and C to set a label A or B. So User A can set Label A, B and C, Users B and C can only set Label A and B.
This works great in the online apllications, all as it should. But on the client I installed (Windows) all users can always see all Labels. I tried all options, deleted accounts and only logged it e.g. with User B, also forced updates of the policies by deleting the registry entries etc. Sorting of the labels and policies in compliance center is correct as well. But no matter what I do, all policies are always shown when using the installed clients.
A second problem which seems to be related to this. is the justification when downgrading a label. I set this up for both policies and also online it works well. Using the clients it does not.
I would appreciate a fast solution as I want to demo this next week and defo need to work it on installed clients (actually thats the use case rather than the web apps).
Thanks!