Hmn, that’s odd. TotalFinder (including the Coloured Labels feature) works fine for me on both 12.6.7 and 12.6.8.
(I also previously tested 12.6.6rc3, though I never got the chance to test it on the final release of 12.6.6.)
Can you try updating to 12.6.7 (which is the current stable version — 12.6.8 is an RC version for developers) and seeing if the issue still persists?
If so, please run the diagnostics script at /Applications/TotalFinder.app/Contents/Resources/diagnose-totalfinder.sh in a Terminal session and send me the resulting file.