This is something that I don't fully understand actually, and I'd love to get some explanation from TMW. Some times (maybe on older versions), I had to set the interpreter afterwards. On my 2017b this works:
>> ylabel( '$\mbox{Absolute x-acceleration}~\ddot{x}_{A} [m/s^2]$', 'Interpreter', 'latex' ) ;
but I remember having had to do it in two operations:
>> h_yl = ylabel( '$\mbox{Absolute x-acceleration}~\ddot{x}_{A} [m/s^2]$' ) ;
set( h_yl, 'Interpreter', 'latex' ) ;
If you are in a situation where you leave it enough time generate a warning, you can just start by disabling that warning.
NOTE : in your expression, what was not valild was the superscript ².
