See explanation below.
Explanation:
To configure a retention label to use a specific sensitive information type, you need to create an auto-labeling policy in the Microsoft Purview portal that applies a label to content containing that sensitive information type. First, create the retention label itself with its retention settings, and then create the auto-labeling policy, select "Apply label to content that contains sensitive info," choose the desired sensitive info type, specify the locations to apply it, and select your retention label.
Step 1: Sign in to the Microsoft Purview portal.
Step 2: If you're using records management [Yes!]: Solutions > Records Management > Policies > Label policies > Auto-apply a label Step 3: Enter a name and description for this auto-labeling policy, and then select Next.
Step 4: For Choose the type of content you want to apply this label to, select one of the available conditions.
Auto-apply labels to content with specific types of sensitive information Step 5: Select U.K. Unique Taxpayer Reference Number sensitive info type in the U.K Personally Identifiable Information (PII) Data template.
When you create auto-apply retention label policies for sensitive information, you see the same list of policy templates as when you create a Microsoft Purview Data Loss Prevention (DLP) policy. Each template is preconfigured to look for specific types of sensitive information. In the following example, the sensitive info types are from the Privacy category, and U.S Personally Identifiable Information (PII) Data template:

Step 6: For the Assign admin units page, keep the default of Full directory. Currently, admin units aren't supported for this policy.
Step 7: For the Choose the type of retention policy to create page, select Adaptive or Static.
[Select Static]
Step 8: If you chose Static: On the Choose locations page, toggle on or off any of the locations.
Select:
Exchange email
SharePoint sites
OneDrive accounts
Microsoft 365 groups

Step 9: Follow the prompts to select a retention label, whether to run the policy in simulation mode or turn it on (if applicable for your chosen condition), and then review and submit your configuration choices.
Reference:
https://learn.microsoft.com/en-us/purview/apply-retention-labels-automatically
https://learn.microsoft.com/en-us/purview/retention-settings#locations

Explanation:

Step 1 - Understanding the requirement
The task is about applying Microsoft Purview Information Protection sensitivity labels to sensitive images and documents using the Azure Information Protection (AIP) unified labeling client.
Sensitivity labels in Purview can be applied in Microsoft 365 apps (Word, Excel, Outlook, PowerPoint), but to label non-Office files like images, PDFs, and other documents, users must use the AIP unified labeling client.
With the AIP client installed, labels can be applied directly in File Explorer by right-clicking the file.
Step 2 - Device compatibility
The AIP unified labeling client runs on Windows devices only.
In the question's context (based on the provided dropdowns), all listed devices (Device1, Device2, Device3) are compatible Windows endpoints.
Therefore, the AIP client can be deployed to all three devices.
Step 3 - How users apply labels
For Office documents # labels can be applied from the ribbon inside Word, Excel, PowerPoint.
For other file types (images, PDFs, text files, etc.) # labels must be applied using File Explorer via the AIP client.
# Reference:
Install and use the Azure Information Protection unified labeling client Apply sensitivity labels to files and emails in Microsoft Purview

To extend DLP to Teams, you must enable Teams chat and channel messages as a location in the DLP policy.
SharePoint and OneDrive protect stored content, but chat sessions require the Teams-specific location.
Reference: DLP in Microsoft Teams

A Preservation Lock in Microsoft Purview Retention Policies enforces strict compliance and prevents certain modifications to ensure data is retained according to compliance requirements.
When a Preservation Lock is applied:
1. You cannot disable or delete the policy.
2. You cannot remove locations from the policy.
3. You cannot decrease the retention period.
4. You can add locations to the policy.
5. You can increase the retention period.
You can expand the retention policy to cover additional locations (e.g., more Exchange mailboxes, SharePoint sites). You can extend the retention duration (e.g., increase from 5 years to 10 years) since this aligns with stricter compliance.