Is "vanilla" category: vanilla categories don't allow for threads to be posted directly in them but are displayed differently in the UI, so they can be used to better organize the site, like how old categories and forums split acted.
Display threads from subcategories on its threads list: obvious.
Display "full" subcategories list on its threads list: obvious.
Display "pills" subcategories list on its threads list: obvious.
Categories could have three toggles: