Okay, I think I have been able to replicate similar with a test user here on Meta.
I’m getting some slightly inconsistent results due to some of the #howto:training topics, but it’s pretty much -
When muted, ‘regular’ categories will display all normal (and above) topics when navigated to directly, whereas all those categories which are Parents will only display topics that are tracking and above (with the expectation that both types of category will behave in a similar manner).