Old fool retaining label's regular shape (7)
I believe the answer is:
octagon
'regular shape' is the definition.
(as in a regular octagon)
'old fool retaining label's' is the wordplay.
'old' becomes 'o' (abbreviation).
'fool' becomes 'con' (I've seen this in another clue).
'retaining' is an insertion indicator (inserted letters are held or retained).
'label' becomes 'tag' (tag is a kind of label).
'con' enclosing 'tag' is 'ctagon'.
'o'+'ctagon'='OCTAGON'
(Other definitions for octagon that I've seen before include "Shape of a square with the corners cut off" , "Figure of many sides" , "Geometric figure with eight sides" , "Eight-sided room" , "with eight angles" .)