Just confirming this is still an issue and is easily reproducable.
To reproduce (requires seperate user test account):
1: Create a collection
2: Add label testing123
3: Set visibility to Users Home and Library Recommended
4: Set testing123 as a label restriction for the test user for the library you created the Collection in
5: Login to the test users account
4: On the Home page and Library Recommended, the Collection that shoud be restricted is fully visible
