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To further understand exactly how MPLS works you must understand how the control plane and data plane compliment each other during the forwarding process in a Label Switch Router. This process is slightly different depending if you are on a PE or P device. Below is a graphic to help illustrate those slight differences.
First we will start with the “bogus†benefit.
In the mid to late 1990’s, after the transition from bridging to switching, and the beginning of MPLS, people thought that switching IP packets was a slower process than just switching a label on top of an IP packet. This isn’t necessarily true. Technologies like Application Specific Integrated Circuits (ASIC’s) brought switching to an entirely new level. ASIC’s were pretty much solely responsible for multiport bridges, effectively what switches are. The term “switch” came around due to a marketing twist on the technology. Marketing of these remarkable “switches†had suggested bridges were too slow for emerging technologies. Thus this reformed multi-port bridge was re-branded and called a switch.