It’s been confirmed by Google that they have temporarily disabled the not mobile friendly label in the mobile results due to a bug. According to John Mueller, he said that Google has turned “the label off for now” but it “should be ok soon.”
This confirmation has come in response to Google mislabeling pages as not mobile friendly over the last 24 hours in the mobile search results. It was bad enough that even AMP pages were labeled as not being mobile friendly. It was John who said that “this is a bug on our side” and Google is in the process of fixing it.
Here was a shot of Google labeling an AMP page as not mobile friendly:
But the Google mobile friendly testing tool showed it at the same time as being mobile friendly: