Controlling the Space Artifacts
The Space Label in the 3D model displays artifact and not actually a label. The artifacts are generated automatically and can not be modified. But if you want the label in the 3D model you can do so by setting configuration variable BB_ANNOTATE_IN3DDGN to a value 1. While this is not the recommended workflow of annotating within Drawing and Sheet Models, it is supported for those who choose to use the legacy methods.
After setting
BB_ANNOTATE_IN3DDGN when you place a Space it uses
default label set in Annotate Tool Settings dialog. Label is displayed
dynamically on the pointer and you can choose the position to place the label
in the DGN.