A micro-label is an identity that falls under the umbrella of a larger identity and cannot stand on its own. For example, an apothisexual person is someone who is asexual and sex-repulsed. If someone says they are apothisexual, it is also implied that they are asexual, because apothisexual is a modifier, making it a specific sub category of asexuals. Micro-labels are most often used to describe more specific feelings, and to create a sense of community for people who also experience those feelings.
Unlike what some people believe, the term micro-label has nothing to do with how popular or well known the identity in question is. There can be uncommon terms that are not micro-labels, because they can stand on their own and do not modify an existing identity. There can also be micro-labels that are well known and popular, but they are still micro-labels because they are a sub-category of an existing identity.