I could be wrong (I often am) but it seems as though labs being unaffected by BE is a bit of an obsolete game mechanic. At least it's necessity is obsolete. I thought the reason that libs were unaffected by BE was because libs boosted tools and if they were affected by BE then it would cause some circular math or something. Somehow labs inherited this limitation but the danger it would prevent doesn't exist.

If there's some worry that dwarves would be too overpowered I'd say just balance dwarves. We have the technology.