How can I migrate items with multiple labels to a single folder?
The short answer is that this is not possible. Consider a Gmail item with two labels: "Vacation" and "Family". This item will be migrated to both folders: /Vacation and /Family. Depending on the Destination system, this may translate into a larger mailbox size.
Is there a way to ensure the item will be migrated to a single folder, so as to avoid increased mailbox size? The problem is that each user would need to specify which labels take precedence over others, a cumbersome process. Even if it was possible to specify which folder takes preference, one of /Vacation or /Family would be missing data.
Note that if you filter the "All Mail" folder, data inflation should take place only for items with two or more labels. For most mailboxes, this should only represent a small percentage of items.