You correct, each time that the Leave event runs it adds lbl1, lbl2, lbl3 label controls to form control collection.
Then it increment this.Controls.Count property. You can define those label (lbl1, lbl2, lbl3) objects out of this event,
because you don't need to instantiate same objects from label class each time that Leave event calls.

Move this part of your code out of Leave event:

#region Put labels on form
Label lbl1 = new System.Windows.Forms.Label();
lbl1.Text = "Name";
lbl1.Location = new System.Drawing.Point(x, y);
lbl1.Size = new System.Drawing.Size(100, 20);
lbl1.TextAlign = System.Drawing.ContentAlignment.MiddleCenter;
this.Controls.Add(lbl1);

Label lbl2 = new System.Windows.Forms.Label();
lbl2.Text = "Full Scale";
lbl2.Location = new System.Drawing.Point(x + 110, y);
lbl2.Size = new System.Drawing.Size(50, 20);
lbl2.TextAlign = System.Drawing.ContentAlignment.MiddleCenter;
this.Controls.Add(lbl2);

Label lbl3 = new System.Windows.Forms.Label();
lbl3.Text = "AlarmSource";
lbl3.Location = new System.Drawing.Point(x + 170, y);
lbl3.Size = new System.Drawing.Size(150, 20);
lbl3.TextAlign = System.Drawing.ContentAlignment.MiddleCenter;
this.Controls.Add(lbl3);

HTH