In profile preferences, category section (/u/*/preferences/categories), there is a choice of the same category for all notification modes i.e. category blacklist (blacklist=selectedCategories) does not work for category-selector component.
So, it may be necessary to add a computed value to /app/assets/javascripts/discourse/controllers/preferences/categories.js.es6 controller to solve this problem:
It’s not a regression, if I remember correctly it was already the case before select-kit (or maybe I’m confused with another screen). However I do agree with you it shouldn’t show a category if it has already been used.
While working on this I discovered that the categories notifications has been extracted from preferences panel, could be wrong but I think it has been broken since April when the preference tab has been reworked.