The statement is false. An MPLS label stack is an ordered sequence of label-stack entries, with the top label processed first and the bottom identified by the Bottom-of-Stack bit. However, the MPLS architecture does not define a universal maximum of three nested labels. An MPLS forwarding operation may replace the top label, remove it, or push one or more additional labels onto the stack.
Practical label depth is constrained by device implementation, forwarding ASIC capabilities, packet size, and the number of network functions being encoded. A conventional MPLS VPN may use two labels: a transport label and a VPN label. More advanced deployments can add labels for traffic engineering, segment routing, entropy, service chaining, or hierarchical transport. This can produce stacks deeper than three entries.
Therefore, “three layers” may describe a limitation of a particular platform, software version, or deployment design, but it is not an MPLS protocol maximum. RFC 3032 defines the stack as a sequence of four-byte entries and explicitly allows one or more entries to be pushed without specifying a three-label ceiling.
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