What part of MainUI are you looking at? The Category pretty much only controls what icon is shown on the Settings → Items page. The icons shown there are not dynamic.
To have dynamic openHAB icons on widgets which are showing on Pages (including the automatically generated Locations, Equipment, and Properties tabs of the Overview Page) you need to set the icon on the Widget. Navigate to the Item, add “Default List Widget” Item metadata. That will bring up a form which should be self explanatory. In particular you want to set the openHAB label and openHAB label depends on state options for the widget.
See Search results for 'default list item widgets' - openHAB Community for examples.