I don’t know how to clarify, but I think the way it works is useful in the scenario where one wants to ignore a tag used site-wide, but needs to read everything in a particular category.
Not the easiest set of features to explain how they interact, ne?
These are contradictory preferences. So you’re saying the fact that someone is muting a tag should prevent them from seeing first posts in a category they are explicitly watching?
That’s what happens if instead of “watching first” posts, they select “watching” or “tracking” (which makes sense, since tags are more specific than categories and should have preference).