Given the following index.xml:
Only the last <Label> of the <TabbedBar> , which has the title set using L('foo') in TSS works. The first 2 show L(foo) as titel and the 3rd one is empty, which is expected as BarItemType doesn't support it (which of course it should, but thats a different story/ticket).
I'd expect L() to work in proxy elements, just like they do in the regular elements like the first <Label> above.
See the attached example project and screenshot.