Additionally, the specs appears to call out this use case:

Thanks, this case is already handled on ircds that implement support for echo-message without labeled-response.

However, as mentioned in my above post, ZNC does not seem to be doing the right thing here.

Even if labeled-response was enabled, this would still be an issue, because it is the sending client that is maintaining internal states and tracking outgoing messages.

That said, with labeled-response, a client could just filter out echoed messages by label. But even with labels, mIRC is currently being more deliberate - it is assigning an internal identifier to associated displayed lines and sent lines, storing nickname count used in the /msg or /notice, and using the identifier as the label (if labeled-response is available), and then tracking incoming messages, so it will only filter out echoed messages that it is expecting.