Yes, I've tried it in Ravencoin and it's working like the Bitcoin counterpart (since it's sending hashes, the server doesn't know if it's an Electrum fork)
And yes, I've been using it in Electrum; it's not something like a third-party addition though since it's officially included in the release binaries and source code.
The server is even hosted by the official website electrum.org, subdomain: labels.electrum.org.

For privacy concerns, the sever wont have any idea of your master public key and labels since everything the labels are encrypted and encoded by the client (your wallet);
The master public key is hashed as your WalletID to identify that you're the owner of the labels, the raw mpk isn't sent.
It's open-source so you don't have to trust my word, just verify: https://github.com/spesmilo/electrum/blob/master/electrum/plugins/labels/labels.py