Wow, I didn't even realize that Java had a break with labels feature. That kind of thing is a throw-back to BASIC and Assembler, and frowned upon by any "serious" programmer.

You might want to have a look at the following link: Branching Statements. It indicates that your use of labels is correct, and I have no idea why Processing does not compile it. However, I would recommend that rather than trying to find a fix for the label behavior you try to do what you intend without resorting to labels.

"break" and "continue" are generally considered fine and are sometimes required, as in the "switch" statement. But I would recommend using boolean variables as flags to control branching behavior, you should be better off with that than with using labels.