Question

A Fabric Data Engineer at a healthcare company applies a 'Highly Confidential' sensitivity label to a lakehouse that contains patient records. The compliance team requires that when a semantic model is built from this lakehouse and a Power BI report is created from that semantic model, the protection follows the data automatically without manual re-tagging. Which statement correctly describes how sensitivity labels behave in this Fabric scenario?

Accepted Answer

Sensitivity labels are inherited downstream, so the semantic model and report automatically receive the 'Highly Confidential' label from the source lakehouse.

Answer

Sensitivity labels apply only to the item they are set on and never propagate to any downstream items in Fabric.

Answer

Sensitivity labels can only be inherited if the downstream items reside in the same workspace as the labeled lakehouse.

Answer

Sensitivity labels are inherited only when data is exported to Excel or PDF, not when items are created within Fabric.