diff --git a/required/latex-lab/latex-lab-block.dtx b/required/latex-lab/latex-lab-block.dtx
index 09529e3a7..b0f8315f6 100644
--- a/required/latex-lab/latex-lab-block.dtx
+++ b/required/latex-lab/latex-lab-block.dtx
@@ -9,7 +9,7 @@
 %
 %    https://www.latex-project.org/lppl.txt
 %
-\def\ltlabblockdate{2024-12-01}
+\def\ltlabblockdate{2025-01-06}
 \def\ltlabblockversion{0.8x}
 %<*driver>
 \documentclass[kernel]{l3doc}
@@ -1749,7 +1749,7 @@
 %    \end{macrocode}
 %    We start by looking at the user supplied keys in \texttt{\#1}. If
 %    there aren't any we reset \cs{@@_evaluate_saved_user_keys:nn} to
-%    do nothing. Otherwise we evaluate and set the keys in the contect
+%    do nothing. Otherwise we evaluate and set the keys in the context
 %    of the current list template. In addition we prepare
 %    \cs{@@_evaluate_saved_user_keys:nn} for execution in the
 %    template for \tn{item}.
@@ -1760,8 +1760,25 @@
      { \cs_set_eq:NN \@@_evaluate_saved_user_keys:nn \use_none:nn }
      {
        \SetTemplateKeys{list}{std}{#1}
+%    \end{macrocode}
+%    The setup for \cs{@@_evaluate_saved_user_keys:nn} is a bit trcky
+%    and has to be done with \cs{cs_set:Npe} even though we don't want
+%    to expand anything and therefore use \cs{exp_not:n} inside. All
+%    this does is that any \texttt{\#} passed in via \texttt{\#1} is
+%    doubled (e.g., from \verb/label-format=\fbox{#1}/ which is
+%    represented as \verb/...\fbox{##1}/). Otherwise, we would end up
+%    with a replacement text like
+%\begin{verbatim}
+%  \SetTemplateKeys {#1}{#2}{label-format=\fbox {#1}}
+%\end{verbatim}
+%   instead of
+%\begin{verbatim}
+%  \SetTemplateKeys {#1}{#2}{label-format=\fbox {##1}}
+%\end{verbatim}
+%  resulting in very odd and puzzling behavior. 
+%    \begin{macrocode}
        \cs_set:Npe \@@_evaluate_saved_user_keys:nn ##1##2
-          { \SetTemplateKeys{##1}{##2}{ \exp_not:n{#1} } }
+          { \SetTemplateKeys{##1}{##2}{ \exp_not:n{ #1 } } }
      }
 %    \end{macrocode}
 %    Has this list a counter name defined in the instance?