Labels beginning with “L” (upper case only) are called local labels. See Section 27.3. Normally you do not see such labels when debugging, because they are intended for the use of programs (like compilers) that compose assembler programs, not for your notice. Normally both the assembler and the linker discard such labels, so you do not normally debug with them.
This option tells the assembler to retain those “L...” symbols in the object file. Usually if you do this you also tell the linker to preserve symbols whose names begin with “L”.
By default, a local label is any label beginning with “L”, but each target is allowed to redefine the local label prefix.