Hi there!
I was relectant to ask for the activation of the hidden setting only to test it out. It was not a necessity but more of a idea to test for specific groups within the community, so with the feedback I received above, it wasn’t prioritized.
If I do, I’ll definitely take @Bas’s and the other’s insights into consideration. I agree that it’s not a good idea to get people to have to navigate too many pages in order to get to their final destination; however, if it’s a specific topic/course or event that would need to be in its own ‘category’ (and not a tag) then I think it might still be a good idea.
On the other hand, I’m curious to test this option first and see if it works for our use-case: Custom Homepage for Groups
I don’t want to use the third-level subcategories for ‘new members’ who are still learning about the community and trying to find their way around, but let’s say the third level sub-categories are for “people in the restaurant” who desire specific dishes and would want to make use of that space with their own unique interior design…etc 
Sounds interesting! Yes, I agree that having to manage multiple forums for the same groups of people wouldn’t be a good idea as much as having first-level categories where these people can explore and connect.
I think both analogies are interesting and come with wisdom but it feels that they’re addressing two different scenarios. You could still apply the concept not to ‘put too many rooms in your mini-restaurants’!
I still believe that generally, I can agree that not having too many navigation/thinking options for community members to get engaged is important, but at the same time, I think that there can be use-cases where three levels of categories is actually justified.