This is correct. The categories page should have a “Muted” section at the bottom of the category list that can be expanded to reveal all of the categories you have muted. You can also select a muted category from the category dropdown that appears to the upper left of topic lists.
Correct, topics with muted tags will not show up on any topic list unless the tag is explicitly selected from the tag dropdown, or you are viewing the tag’s own topic list.
This is where I start to get a little confused. If you navigate to a muted category you will see all of the topics that belong to that category, except those that are also tagged with a muted tag, or those that have been individually muted. As mentioned, you can select the muted tag from the category’s tag drop to show muted tag topics within a category.
Let me know if I’m, misunderstanding or if I can elaborate on anything.