This is an old, old discussion that was already had many moons ago. I originally agreed with you, repeating the same category over and over isn’t that helpful on a category page – and that is the way it used to be, we used to suppress category display on the topic list page when viewing a category – but @sam decided it should be this way.
(You’ll notice the /new page does similarly suppress the new indicator on that page.)
I ultimately don’t have strong feelings either way, it is the kind of thing that I feel people are going to complain about no matter what you choose, as in, no solution will work for all people here.