Is it possible to have different label options depending on current folder location?
e.g if I am within the parent directory "X:\My team"
me and my co-workers could have a set of lables e.g. work assignments "Dave", Bob" etc
but when I am in a different location "C:\My current word docs"
I could have different labels for status e.g. "proof" "rewrite" "submit"
or is there just one global set of labels for all locations?
Labels that you explicitly place on files (as opposed to ones based on some property of the files) come from a global list.
You could make a menu which filters which labels it offers to toggle based on the current folder, but it would be quite a pain to set up if there are more than a handful of labels and folders.
There wouldn't be a massive list.
What I imaged is in a specific shared location, a set of ~6-10 labels for that location that could be shared between a few dopus users co-working. (possibly two sets of this)
Then each user being able to define their own labels for all locations (specific to that persons needs and colour preferences)... basically the regular label list.
If that's possible, please could you point me in the right direction with any hints on creating the menu item?
(If not, what's the procedure here for raising new feature requests? do you have a public issue tracker?) Defined label sets for things like location/file type might be useful in the future for more people.
Thank you for your time 
There isn't a way to restrict which labels can be applied in different locations, but you can make toolbars/menus which show different options in different locations, and use that to show items for certain labels.
The @hideifpath modifier can show or hide a button based on the current path (command modifier reference), and the Properties command can be used to set/toggle a specific label.
To make custom labels work across multiple users/machines, see here for how to sync the label definitions:
Posting in the forum is all you need to do. We keep track of ideas via forum posts.