A text classification task has only one final output, while a sequence labeling task has...

In NLP:

Text classification(e.g., sentiment analysis) predicts a single label for the entire input sequence.

Sequence labeling(e.g., Named Entity Recognition, Part-of-Speech tagging) produces an output label for each token or position in the input sequence.This distinction is important for selecting appropriate model architectures and loss functions.

Exact Extract from HCIP-AI EI Developer V2.5:

"Text classification assigns one label to the whole text, whereas sequence labeling assigns a label to each token in the sequence."