Edit: I think I found the place, just not the method yet. If correct, I will close this question. Sorry.
I have no clue which hook or direction to look into. I would like to have a label or title preprocess function, but that doesnt exist I think.
Its only for a specific content type that I need to show a field's value as title for the referenced nodes.
So it's not about the entity reference widget when editing nodes but rather the title display wherever that reference field is rendering the nodes' titles.