When I open an email it shows my label of the email as being All Mail and Inbox. I have labels automatically set as they come into my gmail account but Airmail doesn’t show me these labels until after I open the label/folder myself and open the email. Gmail app does this extremely well. Am I doing something wrong for this to come up. I should have the option to Archive knowing it’s being left in a label and coming out of my inbox.

As reference, the official Gmail app implements this reasonably well. (It has many other shortcomings so I'm just noting this to show it is possible).

The only way to temporarily have the labels show as they should is to remove the application and enter your email address from scratch, not importing, however this fix is not permanent, it will revert to not displaying the labels.
It is disappointing, one of the most important features for me.

Yeah I agree. In iOS app it's impossible to see which labels are applied to a message which makes the labelling feature pretty much useless. On the desktop version you can change theme to show labels in the inbox. But on iOS you're just stuck! Labels should be displayed on each message and be visible from the Inbox so you don't have to tap into a message to check the associated labels.

Thanks
Grant

Right now when I click on an email, it only shows the sender, the time sent, and the subject line above the message body.

If you want to see the labels and the recipient(s) you have to tap the top part of the message to reveal them, and I find that I'm tapping this a lot so for me this is an unnecessary extra step.

I can see how this was designed so that on a smaller screen you could read more of the message body, but on my iPhone 6 Plus there is more than enough room to reveal all the header info, and see plenty of the message body.

It would be great if this behaviour were an option in the settings so that users can decide if they want to see the all the header info or not. Even better, down the road, it would be great to be able to fine-tune how much information is revealed on message view.

More pressing, the labels that are shown are only Inbox and All Mail, for the other labels to show, you need to go to that specific label that you know is missing, refresh that list of messages, and then go back to the inbox list and when you click on the email in question, tap the header, and it will have the label that was not shown.