Create category “Foo” with setting “suppress this category from homepage”
Create topic “Bar” in category “Foo”
Top menu is set to Latest | Categories | Unread
Topic “bar” is not shown on Latest, but is shown on Categories (so far so good).
In user preferences, select “Categories” as the homepage
Now, for that user, topic “bar” is shown on Latest but the entire Foo category is hidden on their Categories page.
I think it may improve things if there were less magic in the category setting. Instead of “suppress this category from homepage”, there could be two settings:
We no longer have an “entangled” setting. The name was changed to “suppress from latest” and it only suppresses from latest (and does so unconditionally regardless of home page)