Yes it is possible.
Considering your xml is declared like this
var myXML:XML = new XML(<item label="">R1</item>);
You can do the following:
myXML.setChildren("");
trace(myXML.toXMLString());
--
Output: <item label=""></item>
UPDATE
Since you updated your example I need to update my post as well. Since you want to remove only in nodes where @label is "" then you can use the following.
resultXML..item(@label == "").setChildren("");