As regards matters in which without harm to faith or discipline-in the absence of any authoritative intervention of the Apostolic See- there is room for divergent opinions, it is clearly the right of everyone to express and defend his own opinion. But in such discussions no expressions should be used which might constitute serious breaches of charity; let each one freely defend his own opinion, but let it be done with due moderation, so that no one should consider himself entitled to affix on those who merely do not agree with his ideas the stigma of disloyalty to faith or to discipline.
"It is, moreover, Our will that Catholics should abstain from certain appellations which have recently been brought into use to distinguish one group of Catholics from another. They are to be avoided not only as "profane novelties of words," out of harmony with both truth and justice, but also because they give rise to great trouble and confusion among Catholics. Such is the nature of Catholicism that it does not admit of more or less, but must be held as a whole or as a whole rejected: "This is the Catholic faith, which unless a man believe faithfully and firmly; he cannot be saved" (Athanas. Creed). There is no need of adding any qualifying terms to the profession of Catholicism: it is quite enough for each one to proclaim "Christian is my name and Catholic my surname," only let him endeavour to be in reality what he calls himself."In general I agree with the Holy Father, but when he wrote that encyclical letter the Church was much more uniform in its teachings and its discipline. Bad Catholics have always been with us, but back then the hierarchy was more likely to call them out. In contrast, Hans Kung is a rank heretic and probably an apostate and yet he is a de jure Catholic in good standing. Roger Cardinal Mahony and Raymond Cardinal Burke are both Catholics in good standing, and yet their approaches to Catholicism are so radically different as to seem like two different religions. I'm perfectly fine with telling others that to reject one iota of Catholic doctrine is to reject the whole, but I've found that people resent having their orthodoxy impeached even if they deserve it.
Forbidding the use of labels in this case seems like trying to solve violence by outlawing guns. The recourse to labels is a symptom of the decades long chaos that has engulfed the Church. When the Church is strong in her identity and confident in enforcing her teachings again, then the need to use labels like liberal, conservative, traditionalist, etc., will disappear.