TYPO3 Core

Have you checked the behaviour with a lot of label text
without that extension or other extensions extending the
EXT:form ? Maybe it is introduced by some template overrides
not covering core changes ?

Can you test/verify that and add a note/additional screenshot
if it is a pure core issue ?

This is a pure Core issue as far as I can see; it is reproducible on latest main (13.2.0-dev) with

1) Create a form
2) Add an input field
3) Use as name a very long text like a full "lorem ipsum" paragraph:

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

Result: see attached screenshot

The issue is a result of the width and the absolute positioning of the < div class="element-label"> element; I guess that an approach based on display:flex could help here.