The symbol '\lambda' is not identified because it is not in a LaTeX interpreter. MATLAB only supports LaTeX markup when the interpreter property is set to 'latex.' You can use dollar symbols around the text if you want everything to be interpreted as LaTeX, but if you want to have both text and LaTeX in the same line, you need to separate the two parts into an array.
For example, in this specific case, you could use the line:
>>xlabel(['Distance ','$(\lambda)$'],'interpreter','latex')
By separating the text and LaTeX expressions in a char array, you can obtain the desired result.
