On a disastrous fourth day for Australia in the second Test at St George's Park on Wednesday, they were first bowled out for 99, before being asked to follow on and going to stumps at 4-156, still trailing by 170.
It leaves them fighting to avoid defeat in the second Test and a 1-1 scoreline ahead of next week's finale in Cape Town, with Labuschagne, Nic Maddinson and Beau Webster all potential discards.
McDonald would not discuss selection given the Test was still ongoing, but the coach did concede a bleak Wednesday had been a "significant setback" on a pitch with few gremlins.
Travis Head offered the lone bright spot with an unbeaten 87, while there is positive news with Steve Smith hoping to bat on Thursday after a neck issue plagued his first-innings 28.
But Australia are in deep trouble, after having South Africa 6-110 early on the third morning following two rain-marred days, before the hosts recovered to 9-425 declared.
So bad was Australia's batting, former Protea Vernon Philander labelled it "gutless" in SEN's commentary, while David Warner called for Sam Konstas to come in at No.3.
The fall-out will likely be long and detailed, after Marco Jansen took 5-33 and Australia had to follow-on for only the third time since 1988.
But the focus will fall on Maddinson, Labuschagne and Webster.
After being caught driving late on the third evening for a fourth-ball duck off Kagiso Rabada, Maddinson again edged the quick to be out for eight on Wednesday.
Since his shock recall in the first Test, Maddinson has now made scores of 0, 48, 0 and 8.
Labuschagne, meanwhile, has not scored a century since the 2023 Ashes despite a heap of starts..
Most frustrating was the way he fell for the second time on Wednesday, after combining with Head to lead Australia to 1-100.
He let out a massive sigh of relief when an lbw was overturned on 36 off Harmer, with ball-tracking having it missing by 4.7 millimetres.
But the Queenslander threw his wicket away three runs later, hitting Harmer into heavy winds and admonishing himself after being caught.
It was only three Tests ago McDonald declared Labuschagne "needs some big runs". Wednesday's 39 was his highest score since then, after scoring 14 in the first innings.
"There's probably some shots players would like to take back," McDonald said.
"When you do that hard work, you've got to cash in and unfortunately that wasn't the case for Marn.
"He'd be disappointed, we're disappointed and we find ourselves in this situation."
Webster also made an uncomfortable 13 in the first innings before being lbw late in the day for eight in the second. He has averaged 13.5 in the past four Tests.
McDonald confirmed Cameron Green and Josh Inglis are fit again and "will be on the selection table for Cape Town", with Cooper Connolly and Sam Harper also on tour.
Konstas could also figure after a Sheffield Shield century in Perth on Wednesday, with Nathan McSweeney and Kurtis Patterson other possible options.
"It was only a week ago we were a really, really good team," McDonald said.
"We're sitting here right now, and we're starting to defend a team that's performed exceptionally well.
"I'm not going to sit here and hang anyone out to dry."
It means Australia may need to move Matt Renshaw back up to the top of the order, after last week's heroics at No.5 kept him in the middle.
He was out for 12 and 11 in two innings on Wednesday, bowled while leaving Rabada for the second of those dismissals.
The collapse mostly came with South Africa a bowler down, after speedster Anrich Nortje limped off with a groin injury four overs into Wednesday's first spell.
