Ya dear you can define it like that also ...
But I think oxwall should also consider to divide this labelling in two ways
1) for admin panel only - so that admin can create labels which are visible on users profile for guest and members.
2) for members- all members can create custom label for groups so that they can select that particular group to send mails, and also can create their privacy policy.
How can a "Group" be kept private to the members in that group? AND - how can you limit who joins? At the moment, if someone starts a group, ANY ONE can join... in that case, why even have a group? Any fixes coming up for that yet?