Hi,
We have picked up similar issues with the AIP COM add-in enabled (in Office apps like Word)
Try disabling the AIP COM add-in in Office apps - this will force Office to use the built-in labeling - which in turn should log the correct data in Activity Explorer.
Some useful links:
https://learn.microsoft.com/en-us/microsoft-365/compliance/sensitivity-labels-aip?view=o365-worldwide
https://support.microsoft.com/en-us/office/view-manage-and-install-add-ins-in-office-programs-16278816-1948-4028-91e5-76dca5380f8d?ui=en-us&rs=en-us&ad=us
https://learn.microsoft.com/en-GB/office365/troubleshoot/group-policy/office-add-in-not-loaded
cheers,
tom