[Status indicators] Create design spec for label truncation rules

[laurenmrice]

Acceptance criteria

• There is a bug in the current code where Status indicator labels do not truncate/ellipsis as expected.
• Design needs to come up with a spec to determine at what point do labels need to truncate and how.

Tasks

• Come up with a design spec and rules of when and how a status indicator label should truncate.
  • Community recommendations:
    • Expected the label to truncate with an ellipsis when it exceeds the available space.
    • I'm not sure if this is caused by my implementation but I'd expect the icons to not change size when the space runs out. I assume this would be fixed by the label overflowing as well.
• Post design spec and guidance here and in the main parent issue.

[naaa760]

@laurenmrice
please check the PR