I want to see if anyone else can recreate this. I believe it is an issue but maybe just my installation.
I created a new Subflow category (Edit Properties | Categories) called 'Data Blocks #States'. Note the hash sign - I think that is the issue. I added a couple of subflows to this new category but it did not really display properly - everything after 'Data Blocks' was missing in the title. Looked like it treated the '#' as a terminator or something.
So - I thought I'd delete that 'bad' category.
Normally, once you delete / remove the last subflow from a category the category automatically disappears. Now, no matter what I do, I cannot get it to disappear. I think it is invisible and subflows are still 'in' that category.
The category does not appear in the list on the left-nav menu (true - so it 'looks' like it was deleted).
But when using the 'Appearance' control page the item is still there:
BTW: the 'Done' red button does not work either - you HAVE to click 'Cancel' to get out of this screen.
Perhaps someone could let me know which file to edit to clean up this extraneous category?
I tried enabling 'PalleteCategories' in settings.js - no improvement. Forcing it to 'paletteCategories: ,' did nothing either.