It's exactly how it's working! And you still can render it by name like 'categories' without extension.
Use case for subforums
Like most here, I'm building my community to accomplish the dual purpose of building a relationship with my customers while allowing them to engage each other. I'm also using it as a platform in which partners (healthcare space) can engage with my community members. The latter point necessitates the ability for a partner organization to create their own group in which posts and discussions are specific to the group. However, persons COULD be in multiple groups. So, basically, I want people to have the user experience of posting "to" a group rather than a category associated with that group. The only way I can think of to do that would be to have subforums instead.
Hey @Shawn-Price, thanks for reaching out. It still seems like groups + forums per group would be the ideal answer here. Right now out-of-the-box, there is no support for NodeBB to create a category for a group whenever a group is created (the "group forum" concept), though this can be easily automated via a custom NodeBB plugin.