No it's not standard, what I did was open /products.php and there is the following code near the bottom of the page:
Code:
$search_data['products'] = array(
'categoryid' => $cat,
'search_in_subcategories' => 'N',
'category_main' => 'Y',
'category_extra' => 'Y',
'forsale' => 'Y',
'use_cached_ids' => TRUE,
);
I changed the 'search_in_subcategories' to Y and it now shows all products within a category, but as I've found out if a product is in multiple categories it doesn't show them all.