best response confirmed by SamTeerlinck (Occasional Contributor)
Hi Sam,
AIP automatic labeling refers to labeling done by either:
1. AIP client which automatically applies a label when a user opens / creates a file
2. AIP scanner which runs over on-premises repositories and applies labels to the files in them according to certain conditions (like file content).

In this example you can think of MCAS as a scanner for cloud repositories which allows you to automatically scan files stores in SPO/OD/Box/Google drive etc... and apply labels to those files based on the criteria you define.