Fix ancestor group labels when moving projects

When moving within the same ancestor group, we should not recreate
these labels because these are still available to the moved project

Also, we should take ancestor group labels into account when
searching for labels that we need to transfer

app/services/labels/transfer_service.rb

@@ -49,7 +49,7 @@ module Labels
       Label.joins(:issues)
         .where(
           issues: { project_id: project.id },
-          labels: { type: 'GroupLabel', group_id: old_group.id }
+          labels: { type: 'GroupLabel', group_id: old_group.self_and_ancestors }
         )
     end
     # rubocop: enable CodeReuse/ActiveRecord
@@ -59,14 +59,14 @@ module Labels
       Label.joins(:merge_requests)
         .where(
           merge_requests: { target_project_id: project.id },
-          labels: { type: 'GroupLabel', group_id: old_group.id }
+          labels: { type: 'GroupLabel', group_id: old_group.self_and_ancestors }
         )
     end
     # rubocop: enable CodeReuse/ActiveRecord
 
     def find_or_create_label!(label)
       params    = label.attributes.slice('title', 'description', 'color')
-      new_label = FindOrCreateService.new(current_user, project, params).execute
+      new_label = FindOrCreateService.new(current_user, project, params.merge(include_ancestor_groups: true)).execute
 
       new_label.id
     end

changelogs/unreleased/fix-duplicate-labels-when-moving-projects.yml

+---
+title: Fix duplicate labels when moving projects within the same ancestor group
+merge_request: 27261
+author:
+type: fixed

spec/services/labels/transfer_service_spec.rb

@@ -15,7 +15,7 @@ describe Labels::TransferService do
 
     subject(:service) { described_class.new(user, old_group, project) }
 
-    it 'recreates the missing group labels at project level and assigns them to the issuables' do
+    it 'recreates missing group labels at project level and assigns them to the issuables' do
       old_group_label_1 = create(:group_label, group: old_group)
       old_group_label_2 = create(:group_label, group: old_group)
 
@@ -27,6 +27,18 @@ describe Labels::TransferService do
       expect(labeled_merge_request.reload.labels).to contain_exactly(project.labels.find_by_title(old_group_label_2.title))
     end
 
+    it 'recreates missing ancestor group labels at project level and assigns them to the issuables' do
+      old_group_ancestor_label_1 = create(:group_label, group: old_group_ancestor)
+      old_group_ancestor_label_2 = create(:group_label, group: old_group_ancestor)
+
+      labeled_issue = create(:labeled_issue, project: project, labels: [old_group_ancestor_label_1])
+      labeled_merge_request = create(:labeled_merge_request, source_project: project, labels: [old_group_ancestor_label_2])
+
+      expect { service.execute }.to change(project.labels, :count).by(2)
+      expect(labeled_issue.reload.labels).to contain_exactly(project.labels.find_by_title(old_group_ancestor_label_1.title))
+      expect(labeled_merge_request.reload.labels).to contain_exactly(project.labels.find_by_title(old_group_ancestor_label_2.title))
+    end
+
     it 'recreates label priorities related to the missing group labels' do
       old_group_label = create(:group_label, group: old_group)
       create(:labeled_issue, project: project, labels: [old_group_label])
@@ -71,5 +83,22 @@ describe Labels::TransferService do
       expect(labeled_issue.reload.labels).not_to include(old_group_label)
       expect(other_project_labeled_issue.reload.labels).to contain_exactly(old_group_label)
     end
+
+    context 'when moving within the same ancestor group' do
+      let(:other_subgroup) { create(:group, parent: old_group_ancestor) }
+      let(:project) { create(:project, :repository, group: other_subgroup) }
+
+      it 'does not recreate ancestor group labels' do
+        old_group_ancestor_label_1 = create(:group_label, group: old_group_ancestor)
+        old_group_ancestor_label_2 = create(:group_label, group: old_group_ancestor)
+
+        labeled_issue = create(:labeled_issue, project: project, labels: [old_group_ancestor_label_1])
+        labeled_merge_request = create(:labeled_merge_request, source_project: project, labels: [old_group_ancestor_label_2])
+
+        expect { service.execute }.not_to change(project.labels, :count)
+        expect(labeled_issue.reload.labels).to contain_exactly(old_group_ancestor_label_1)
+        expect(labeled_merge_request.reload.labels).to contain_exactly(old_group_ancestor_label_2)
+      end
+    end
   end
 end