About categories
The Categories form is used to create a directory structure for grouping products, to make them easier to find in your Product Catalog. For example, if you manufacture doors, you could make categories for Interior Doors, Exterior Doors, and Barn Doors. Sub-categories for Interior Doors might include French Doors and Accordion Doors.
Do not use categories for characteristics such as color and size. Instead, you can use product filter attributes to help CPQ Enterprise Quoting users narrow their search. See About product filter attributes.
Also note, the My Items and Named Configurations categories are pre-defined and cannot contain subcategories or be deleted; however, their names and sort order can be modified.