How would you show the child categories and indicate their relationship without the parent to group them? N new category rows would be more noisy visually than a single new category row and the compact subcategory display.
Take howto as an example:
The title could be de-emphasized or an icon added to the left and description hidden when muted, but keep the subcategories visible as they’ve not been muted and will still appear in /latest. The alternative would be six new rows, with no indicator that they were related by a parent category.
So what happens if someone only wants to mute the parent and then certain subcategories? That’s a sweeping change which could create a lot of confusion.
Meta has a good example if this, what if I want to see all #feature:announcements, but not every Contribute > Feature post. Your suggestion would make that impossible:
You’re asking for a sledgehammer to save yourself a few clicks, and make more fine-grained muting impossible.