The Label Tool (on the MAP tab, in the Label group) creates a curved label if it can. Otherwise it creates a rotated label. It uses the rotation angle of the segment under the mouse click to rotate the label. The placement of the label relative to the mouse click depends on which of the nine (9) placement positions is set in the Label Style dialog box (double-click on the label name to open this dialog).
The Label Toolplaces a label anywhere along the line, even if it hangs off the beginning of the line.
When zooming out on a map curved labels may convert to rotated labels. In some cases you may lose the label if it no longer fits along the line segment. If you want to keep a label when this happens, use the Label Tool to reposition the label. It then becomes a custom-located label and always displays on the map.