Hello,
The labels are displayed big because of the text and font size. To make them smaller try adding the following Custom CSS in the Global Custom CSS area under Theme Settings >> Custom CSS.
.labels-rounded .product-label {
font-size: 12px;
}
You can adjust the font size according to your needs.
If you are trying to ask anything else then please provide with some relevant screenshots of the specific area to check it myself and help you out accordingly.
Regard’s.
Xtemos Studios.