In the following sync rule configuration, the desired outcome is to have contacts labeled “CRM” synced with HubSpot. What would you fix to make this setup work?

This is a perfectly sound rule setup and nothing would need to be changed.
The second rule needs to be deactivated. It does not come with a filter and would sync all contacts regardless of their label.
Each rule still needs to have an action to define whether contacts can be created or only updated.

The correct answer is:

The second rule needs to be deactivated. It does not come with a filter and would sync all contacts regardless of their label.