Context

While trying to rename a volume you get the following error:

WARNING: The volume label is not valid.
Set-Volume : Invalid Parameter

However you are sure there is no problem with the name itself. For
example, renaming your volume to test doesn’t work neither.

The reason

Your disk may be write protected.
To verify this point do the following:

1. Use the Get-Partition cmdlet to find the disk number matching to your drive
   letter.
   
2. Than use the Get-Disk cmdlet to verify if this disk is write protected.

           Get-Disk -Number 3 | Select-Object -Property IsReadOnly
           

If the value is True than your disk is write protected.

How to remove the write protection

Just use the Set-Disk cmdlet.

Set-Disk -Number 3 -IsReadOnly $false