The following SPARQL query runs in less than 1 second...

SELECT ?item ?itemLabel WHERE {
  {
    SELECT ?item WHERE { ?item wdt:P31 wd:Q5. }
    LIMIT 10
  }
  SERVICE wikibase:label { bd:serviceParam wikibase:language "[AUTO_LANGUAGE],en". }
}

... while the following query, which is equivalent but much simpler and common, runs in more than 17 seconds...

SELECT ?item ?itemLabel WHERE {
  ?item wdt:P31 wd:Q5.
  SERVICE wikibase:label { bd:serviceParam wikibase:language "[AUTO_LANGUAGE],en". }
}
LIMIT 10

There's no point in having SERVICE wikibase:label optimized for the first case, we need a cleverer implementation that doesn't cause unnecessary timeouts. This optimization becomes more necessary as the number of triples grows.