return after the figure?
If you get no error message, the above symptoms indicate that the label 'Interpreter' property is somehow set to default to 'none'.
If it were 'tex', the string would be interpreted as desired, it it were 'latex' it would generate an error about invalid interpreter syntax.
Given the additional info from the series of comments below, the workaround to your problem seemingly caused by Simulink being overly aggressive in its setting of MATLAB default graphics parameters is to use the explicit named parameter when calling x/ylabel
etc., SHOULD do it. If, for some reason, the instantiation of ylabel that is being calls ignores the named parameter (if it does, I'd also call that a bug and report it), then you can always revert to forcing it after the fact...
Changing the interpreter property for the object itself will change the behavior of the object; setting the default property after the fact won't; the object is already in existence and the default behavior is only looked at on object creation.
That's why the set options above didn't work -- I didn't think of the behavior actually being embedded in the function calls themselves; that's just so egregious I didn't think any chance TMW would have done -- I presumed it had gotten set once by accident and fixing it once would fix it forever.