Confused by Paper UI setup - what is "Category"?

I did do some 1.x setup a while ago, so maybe I am just confused because of my preconceptions. But, what is “Category”? (see below)

What are the possible values for it? What are Categories used for?
I thought “Groups” were the thing…


I admit it’s not the best name for it, but it really represents an icon (of the Item) :wink:

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Ok. Thanks!