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Just to make sure I understand the issue. Is it that when you touch the arrow next to the selected account, you don't get a full list of your accounts whereas before you did? If you can, please post a screenshot.
Please have a look at the screenshot below. To add a label, touch "Add label", then select the account and label and finally touch "Add label" again to confirm. The newly added label will appear in the list below. You can delete labels by touching the "x" next to them.
Finally, touch "Add widget" to confirm. Being able to add more than one label on the same widget is one of the key new features of the recent update. We are working on making this feature easier to use.