MPLS tag-switching

Question

I'm trying to bootstrap myself on MPLS and ran into an unusual problem in the field.
We've got a mesh of routers setup to do tag switching amongst each other to support a few pseudo-wire MPLS point to point links for customers.
Our typical conf:
ip cef
mpls label protocol ldp
tag-switching tdp router-id Loopback0 force
int FastEthernet0/0
description WAN link
ip address 1.2.3.1 255.255.255.252
mpls label protocol ldp
tag-switching mtu 1532
tag-switching ip
int POS1/0
description Another WAN link
ip address 1.2.3.5 255.255.255.252
mpls label protocol ldp
tag-switching ip
int FastEthernet 2/0
description Non MPLS Cust Facing
ip address 10.10.0.1 255.255.255.0
int FastEthernet 2/1
description MPLS Pseudowire Cust Facing
mpls l2transport route 1.2.3.253 10101
Now, it was my understanding that the tag-switching mtu statement is only for tag-switched packets, untagged IP uses the interface's default mtu of 1500 if not otherwise adjusted. Someone removed the tag-switched mtu 1532 statement off a couple WAN links, and both MPLS and non pseudowire tagged traffic were affected. There was still basic L2/L3 connectivity, but larger IP packets were being dropped.
The observed behavior implied to me that all packets were being tagged, and reading up on the tag-switching command reference re-enforces that assumption. Dropping down to the lab, doing a ping between two routers with tag-switching setup and ldp neighborship established, neither echo requests or replies are tagged.
Where is the hole in my understanding of how this works?

Answer 1

Your understanding is correct. By default LDP will allocate and advertise label for all prefixes and all traffic will be therefore label switched. You need to configure label filtering if you only need certain prefixes to have labels assigned and advertised by LDP.
Here's a brief example where only loopback addresses for the routers hosting the pseudowires are advertised.
no tag-switching advertise-tags
tag-switching advertise-tags for 1
access-list 1 permit 192.168.100.0 0.0.0.255
This same configuration need to be applied for all LDP enabled routers. It will only allow label advertisement for prefixes in the 192.168.100.0-192.168.100.255 range.
Regards