It's all about (Data) taxonomy and labels.
AKA - The stuff musicians hate, but governance people love!


Here are the resources:
https://techcommunity.microsoft.com/t5/security-compliance-and-identity/protect-your-sensitive-information-wherever-it-lives-or-travels/ba-p/360595

https://learn.microsoft.com/en-us/microsoft-365/compliance/sensitivity-labels?view=o365-worldwide