If your instance supports Markdown, you don't have to enable Markdown support in #Fedilab settings.
Enabling that option will defeat the display of formatted text.
Instances supporting Markdown transform Markdown format when posting into HTML with basic tags supported by all apps.
If you want to post in Markdown, just enable extra features in settings. You will have an option to do it.
Markdown and LaTeX supports are for specific instances (otherwise only Fedilab will interpret it).