diff --git a/addons/web_editor/static/src/js/wysiwyg/widgets/link.js b/addons/web_editor/static/src/js/wysiwyg/widgets/link.js
index 5c881e71d0e..75b305c4b04 100644
--- a/addons/web_editor/static/src/js/wysiwyg/widgets/link.js
+++ b/addons/web_editor/static/src/js/wysiwyg/widgets/link.js
@@ -31,8 +31,6 @@ const Link = Widget.extend({
             title: _t("Link to"),
         }, this.options));
 
-        this._setLinkContent = true;
-
         this.data = data || {};
         this.isButton = this.data.isButton;
         this.$button = $button;
@@ -86,7 +84,7 @@ const Link = Widget.extend({
                 $node = $node.parent();
             }
             const linkNode = this.$link[0] || this.data.range.cloneContents();
-            const linkText = linkNode.textContent;
+            const linkText = linkNode.innerText;
             this.data.content = linkText.replace(/[ \t\r\n]+/g, ' ');
             this.data.originalText = this.data.content;
             if (linkNode instanceof DocumentFragment) {
@@ -488,11 +486,19 @@ const Link = Widget.extend({
      * @param {boolean} force
      */
     _updateLinkContent($link, linkInfos, { force = false } = {}) {
-        if (force || (this._setLinkContent && (linkInfos.content !== this.data.originalText || linkInfos.url !== this.data.url))) {
+        if (force || (linkInfos.content !== this.data.originalText || linkInfos.url !== this.data.url)) {
             if (linkInfos.content === this.data.originalText) {
                 $link.html(this.data.originalHTML);
             } else if (linkInfos.content && linkInfos.content.length) {
-                $link.text(linkInfos.content);
+                let contentWrapperEl = $link[0];
+                // Update the first child element that has the same inner text
+                // as the link with the new content while preserving child
+                // elements within the link. (e.g. the link is bold and italic)
+                while (contentWrapperEl.firstElementChild
+                    && (contentWrapperEl.firstElementChild.innerText === $link[0].innerText)) {
+                    contentWrapperEl = contentWrapperEl.firstElementChild;
+                }
+                contentWrapperEl.innerText = linkInfos.content;
             } else {
                 $link.text(linkInfos.url);
             }
diff --git a/addons/web_editor/static/src/js/wysiwyg/widgets/link_tools.js b/addons/web_editor/static/src/js/wysiwyg/widgets/link_tools.js
index b6cee090e9a..99160708d92 100644
--- a/addons/web_editor/static/src/js/wysiwyg/widgets/link_tools.js
+++ b/addons/web_editor/static/src/js/wysiwyg/widgets/link_tools.js
@@ -23,6 +23,7 @@ const LinkTools = Link.extend({
         'change .link-custom-color-border input': '_onChangeCustomBorderWidth',
         'keypress .link-custom-color-border input': '_onKeyPressCustomBorderWidth',
         'click we-select [name="link_border_style"] we-button': '_onBorderStyleSelectOption',
+        'input input[name="label"]': '_onLabelInput',
     }),
 
     /**
@@ -31,8 +32,7 @@ const LinkTools = Link.extend({
     init: function (parent, options, editable, data, $button, link) {
         this._link = link;
         this._observer = new MutationObserver(() =>{
-            this._setLinkContent = false;
-            this._observer.disconnect();
+            this._updateLabelInput();
         });
         this._observer.observe(this._link, {subtree: true, childList: true, characterData: true});
         this._super(parent, options, editable, data, $button, this._link);
@@ -358,6 +358,14 @@ const LinkTools = Link.extend({
         this.$button.removeClass('active');
         this.options.wysiwyg.odooEditor.observerActive("hint_classes");
     },
+    /**
+     * Updates the label input with the DOM content of the link.
+     *
+     * @private
+     */
+    _updateLabelInput() {
+        this.el.querySelector('#o_link_dialog_label_input').value = this.linkEl.innerText;
+    },
 
     //--------------------------------------------------------------------------
     // Handlers
@@ -440,6 +448,23 @@ const LinkTools = Link.extend({
         this._adaptPreview();
         this.options.wysiwyg.odooEditor.historyUnpauseSteps('_onURLInput');
     },
+    /**
+     * Updates the DOM content of the link with the input value.
+     *
+     * @private
+     * @param {Event} ev
+     */
+    _onLabelInput(ev) {
+        const data = this._getData();
+        if (!data) {
+            return;
+        }
+        this._observer.disconnect();
+        // Force update of link's content with new data using 'force: true'.
+        // Without this, no update if input is same as original text.
+        this._updateLinkContent(this.$link, data, {force: true});
+        this._observer.observe(this._link, {subtree: true, childList: true, characterData: true});
+    },
 });
 
 return LinkTools;
diff --git a/addons/web_editor/static/src/js/wysiwyg/wysiwyg.js b/addons/web_editor/static/src/js/wysiwyg/wysiwyg.js
index e758e3b0cb2..0541879604c 100644
--- a/addons/web_editor/static/src/js/wysiwyg/wysiwyg.js
+++ b/addons/web_editor/static/src/js/wysiwyg/wysiwyg.js
@@ -1185,9 +1185,13 @@ const Wysiwyg = Widget.extend({
                         startNode: options.link || this.lastMediaClicked,
                     });
                     if (!link) {
-                        return
+                        return;
                     }
-                    const linkToolsData = Object.assign({}, this.options.defaultDataForLinkTools);
+                    const linkToolsData = Object.assign({}, this.options.defaultDataForLinkTools, {
+                        // If the link contains an image or an icon do not
+                        // display the label input (e.g. some mega menu links).
+                        needLabel: !link.querySelector('.fa, img'),
+                    });
                     this.linkTools = new weWidgets.LinkTools(this, {
                         wysiwyg: this,
                         noFocusUrl: options.noFocusUrl,
diff --git a/addons/web_editor/static/src/xml/wysiwyg.xml b/addons/web_editor/static/src/xml/wysiwyg.xml
index 2b92ae3a0ac..3030b377ea6 100644
--- a/addons/web_editor/static/src/xml/wysiwyg.xml
+++ b/addons/web_editor/static/src/xml/wysiwyg.xml
@@ -184,14 +184,6 @@
         </div>
     </div>
     <we-customizeblock-option t-name="wysiwyg.widgets.linkTools">
-        <we-row t-attf-class="o_we_sublevel_1 {{widget.needLabel ? '' : 'd-none'}}">
-            <we-title>Link Label</we-title>
-            <we-input class="o_we_user_value_widget">
-                <div>
-                    <input name="label" id="o_link_dialog_label_input" t-att-value="widget.data.content" type="text"/>
-                </div>
-            </we-input>
-        </we-row>
         <we-row id="url_row" t-attf-class="#{widget.isButton ? ' d-none' : ''}">
             <we-input class="o_we_user_value_widget o_we_sublevel_1">
                 <we-title class="o_short_title"></we-title>
@@ -208,6 +200,14 @@
                     </div>
             </we-button>
         </we-row>
+        <we-row t-attf-class="o_we_sublevel_1 {{widget.needLabel ? '' : 'd-none'}}">
+            <we-title>Label</we-title>
+            <we-input class="o_we_user_value_widget">
+                <div>
+                    <input name="label" id="o_link_dialog_label_input" t-att-value="widget.data.content" type="text"/>
+                </div>
+            </we-input>
+        </we-row>
         <we-row>
             <we-select class="o_we_user_value_widget o_we_sublevel_1">
                 <we-title>Style</we-title>
diff --git a/addons/website/static/tests/tours/link_tools.js b/addons/website/static/tests/tours/link_tools.js
index f365c6a477a..0ccdcd45186 100644
--- a/addons/website/static/tests/tours/link_tools.js
+++ b/addons/website/static/tests/tours/link_tools.js
@@ -34,10 +34,33 @@ wTourUtils.registerWebsitePreviewTour('link_tools', {
     clickOnImgStep,
     // 2. Edit the link with the link tools.
     {
-        content: "Click on the newly created link, change content to odoo website",
+        content: "Click on the newly created link",
         trigger: 'iframe .s_text_image a[href="http://odoo.com"]:contains("odoo.com")',
+    },
+    {
+        content: "Change content (editing the label input) to odoo website_2",
+        trigger: '#o_link_dialog_label_input[value="odoo.com"]',
+        run: 'text odoo website_2',
+    },
+    {
+        content: "Click again on the link",
+        trigger: 'iframe .s_text_image a[href="http://odoo.com"]:contains("odoo website_2")',
+    },
+    {
+        content: "Change content (editing the DOM) to odoo website",
+        trigger: 'iframe .s_text_image a[href="http://odoo.com"]:contains("odoo website_2")',
         run: 'text odoo website',
     },
+    clickOnImgStep,
+    {
+        content: "Click again on the link",
+        trigger: 'iframe .s_text_image a[href="http://odoo.com"]:contains("odoo website")',
+    },
+    {
+        content: "Check that the label input contains the new content",
+        trigger: '#o_link_dialog_label_input[value="odoo website"]',
+        run: () => null, // it's a check
+    },
     {
         content: "Link tools, should be open, change the url",
         trigger: '#o_link_dialog_url_input',