This lab shows two ISPs exchanging VPN labels over a multi-hop eBGP session between their route reflectors – in other words, Inter-AS Option C.
The ASBRs have an IPv4 eBGP session between them. They use “send-label” and “set/match mpls-label” in route-maps to exchange labels and IPs for the next-hop addresses. This enables the LSP between the reflectors to establish their session and between the PEs of each ISP.
The labels for these next hops are then sent over IPv4 iBGP through the reflectors using the ‘send-label’ command. This is opposed to redistributing the neighboring ISPs next-hops into the local IGP.
A cheat sheet on the different MPLS options can be found here.
As an interesting side note, the ABSRs in the GNS3 lab – which use IOS 3725s – do not require explicitly setting next-hop-self on their BGP-LU session to their local router reflectors. However, the ABSRs in the EVE-NG lab – using IOS-XE 16.6.5s – do require the next-hop-self command.