When a packet arrives at an LSR prior to said LSR knowing of a label associated with the necessary FEC to get the packet out, the packet is forwarded based on information stored in the FIB. The packet is, of course, forwarded to the next-hop router listed in the FIB. The receiving downstream router performs a lookup and determines whether it has a label associated with the needed FEC. If so, the receiving downstream router imposes the label and sends the packet on its way. If not, the process repeats itself. It is conceivable, though unlikely, that the router might be CEF switched all the way across the network.
The reasoning behind this functionality is to allow packet forwarding in times of convergence or other situations where MPLS routers have no labels for a particular FEC.
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