Ive had the same problem myself
Ive not tried it in 4 yet but I see the way that categories are handled is better.
V4 is not realy ready for production sites yet even though Im developing one myself at the moment. its not due for release for a while though.
best way prior to v4 is to get rid of the categories side menu altogether and just use the subcategory links that appear in the center column
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