Like you, I would also try to save the paper label. I would do some experimenting before trying to work on the actual label, however. I would try it to find some paper in similar condition to the label, maybe some modern news paper or some old paper that has some age on it to experiment with.
My initial attempt, again, using the substitute paper and a scrap of well sanded hardwood, would be to first put a coat of finish on the hardwood scrap and then to let it dry for a few days. I would then experiment with something like lacquer and a small and fine artists brush, and brush on a light coat on the now finished scrap of hardwood, and then see if I could get the paper to stick to the finish by letting it dry until it was pretty tacky and then trying to stick it down. I would do several trials until I found what would work and I knew what I was doing.
If the lacquer does not work well I would try other finishes I had in the shop, in hope that something would work well.
Once the experimenting was done I would attempt to use the fine artist brush to work a very thin coat of finish between the actual paper label and the handle, let it dry to the point that gave you success with the experiments and then stick the real label down. You might have to use something like tooth picks or paper clips to keep the paper and the finished handle apart so that the finish will dry just the right amount to get the paper to stick down to the handle.
At that point I will have experimented more with seeing if a scrap of the practice paper would keep the writing nice and readable with the spray lacquer on it. It might not, the lacquer might soak in and make the paper tend to become semi-translucent. I don't know what it will do, you will have to experiment. If the spray lacquer makes it translucent you will again have to experiment. I might try sanding sealer, or some other finish. One key is VERY thin coats of spray, so it will dry fairly quickly without soaking in much.
Once those issues are solved I would then mask off maybe a 1/4 inch around the stuck down label and use the best results from the finish on the paper testing to put finish over the paper. I would put on two or three coats and then pull off the masking and refinish the rest of the handle.
Such may not be the best approach, but it is what I would try. I would want a few coats of finish over the paper and the rest of the handle to protect the paper from wear.
Stew