I've been wondering on how to remove labels with the new interface of blogger. I did make some research, but mostly, the tutorials they had was kind of old, I mean, the interface used was the old one, so that is why, it's kind of difficult for me to identify and differentiate it. Just bear with me, I'm a noob :P
Fortunately, after some minutes of tweaking, I finally found out on how to resolve it, though I know, it's just a little issue and kind of absurd, but then for me, it's an achievement (yey!) :)
Anyways, to start with, go to POST and edit them, see screenshot below
Repeat it with other post having that label, and after that, it will just disappear, because that label has no longer hooked up with any post in your blog, so it'll just be automatically removed.
Hope it helps, like and share it.. Thanks