It sure does. There's two easy ways to mitgate how much Labyrinth sucks though:
- Play the Taxman remaster and enable elemental shields. Having bubble shields available for Labyrinth is a huge help, as long as you can avoid getting hit. Enabling the 7th Emerald also means you can get Super Sonic for Act 2 and 3, which pretty much mitigates the entire thing.
- Play the MegaPlay version of Sonic 1 (available through the Sega Ages release on Switch). It entirely skips over Labyrinth and by extension Scrap Brain Act 3 (also Marble).
I'm a Marble fan though, sorry to say. You can skip past a lot of the waiting just through taking risky jumps. Remaster once again helps by letting you enable flame shields; can skip good chunks of the acts just through walking on lava.
I think it was a great idea on paper to have the zones progress from all-natural to full dystopia (Green Hill -> Labyrinth -> Marble -> Star Light -> Spring Yard -> Scrap Brain); they just fumbled by designing Labyrinth to be way too hard and didn't have the dev time to redesign it from scratch.
Some cohesion across zones is something they tried to achieve from the start but didn't really manage until Sonic 3. Sonic 2's original plan also attempted something similar in theory; the game set across different time periods that would change with story events. Multiple zones had clear equivalents across the different eras too; Emerald Hill (originally Green Hill), Mystic Cave (originally Dust Hill), Hill Top (originally ) and Chemical Plant being the same spot in the present, ruined present, past and future respectively.