I understand that for several years the cabin a passenger is traveling in is reflected in the bar code on the bag tag. The first one I remember doing it was LH who also have a very large PRIORITY printed on the tag. Ground staff from a number of carriers have told me before that the tags are there to reassure passengers and so that if any errors occur with automatic sorting they can be rectified. Whether of course that happens is anyone’s guess.
Recent experience of LH was very good with priority tags but other than that it’s the carriers from SE Asia (as usual!) who always get this right. SQ even manage to have F come followed by C followed by *G in Y and then ordinary Y. Now, if they can get it right, why can’t others?