There are a substantial number of files containing a "1" in my download directory which haven't been deleted.

To be sure however, I just tried a test set again... Repeatedly...

You're not completely incorrect, but almost.

List of files (Every single one contain a "1"):
Getting Started With Oracle Solaris 11 Express Guide 820-7799.pdf
M3291 InstallGuide.pdf
Prioritized_Approach_PCI_DSS_1_2.pdf
file-1.pdf
hdama bios 188.zip
information_supplement_11.3.pdf

The first part of the script
find . -exec mdls -name kMDItemFSLabel {} \; -exec mdls -name kMDItemFSName {} \;
Outputs this:

kMDItemFSLabel = 1
kMDItemFSName = "file-1.pdf"
kMDItemFSLabel = 0
kMDItemFSName = "Getting Started With Oracle Solaris 11 Express Guide 820-7799.pdf"
kMDItemFSLabel = 0
kMDItemFSName = "hdama bios 188.zip"
kMDItemFSLabel = 0
kMDItemFSName = "information_supplement_11.3.pdf"
kMDItemFSLabel = 0
kMDItemFSName = "M3291 InstallGuide.pdf"
kMDItemFSLabel = 0
kMDItemFSName = "Prioritized_Approach_PCI_DSS_1_2.pdf"

find . -exec mdls -name kMDItemFSLabel {} \; -exec mdls -name kMDItemFSName {} \; | awk -F " = " ' $2 ~ /1/{ getline; print $2 }' | sed -ne '/^".*/p' | awk '{ print "rm "$0"; touch "$0 }'

Outputs this:
rm "file-1.pdf"; touch "file-1.pdf"
rm "Prioritized_Approach_PCI_DSS_1_2.pdf"; touch "Prioritized_Approach_PCI_DSS_1_2.pdf"

All of the files contain a "1".
One file was "grey"
One file contained a "1" and it was the last one found!!!

When the script finds a "1" in the part of a line after the " = " it then grabs the <b>next line</b> and ignores the current one.

So if it matches a "1" in a file name:
kMDItemFSName = "hdama bios 188.zip"
It gets the next line which is:
kMDItemFSLabel = 0
Of which it would try to delete "0", except that I use sed to filter any line not containing a `"` (quote)

The problem is that if it matches the file name on the last line.... "getline" cannot get the next line and returns the current one.

The bottom line is that your change is a good idea.
Thanks...

Yes sorry if that wasn't clear my comment was only on the $2 ~ /1/ part that matches every second field containing a '1' (so it matches filenames containing a '1' but it also matches kMDItemFSLabel = 1 ) not on the overal effect of your script. Glad you liked the fix.