Data Driven Field Config Assignment

I am trying to understand how data driven Field Config assignments work. My initial understanding was that the field config properties can be set using the data in the query result. Meaning for instance if I get the labels like ts {color="blue", displayName="Channel B"} for my time series query, then automagically filed config properties color and displayName will be set accordingly.

But based on my tests as I have also mentioned here it does not seem to be the case.

That would be great if someone could elaborate on how data driven filed config assignment works and how I can use labels to assign those properites.

Tnx.

Linking to this related issue, where there is a discussion. Thanks for hopping on both, @farzadpanahi