LRD 6300C Clear Label Sensor - Slot Height Discussion
This picture highlights the AREA marked as "SENSOR".
The label path must travel over this area for the sensor to work.
So if you have labels that are quite "short" the sensor needs to be lowered so that the labels pass the "SENSOR AREA".
Ideally, if you just have tall labels you can run them toward the bottom of the gap to better control the label web path as it passes through the slot of the Sensor and over the "SENSOR AREA".
From LabelOn Modular Manuals