Hi Shino A category tree in the catalog allows organization of the catalog items by category. This is completely optional and is an implementation decision based on your business use cases. Typically to allow easier navigation of the catalog.
Let's take the Product Catalog (TMF 620) as an example – you might create a Content catalog, and within this catalog you could have root categories Films, Music, eBooks. Then each category would have subcategories, say for Films you could have Documentaries, Romance, Thriller, SciFi, etc.
Catalog materials, in particular Product Offerings, would be attached to relevant categories.
A discovery UI might choose to render the category tree, or search for catalog items by categories.
Personally I am less sure that there is a good use case for categories in Service and Resource, but maybe that's because I am not so familiar with those functional areas.
Anyway I don't think there is a direct impact on ServiceCandidate, you can have candidates without categories.
Hope it helps.