In 'External Tools' one can add categories, but a category cannot be removed. The 'Remove' button is only available for tools (screenshot attached with the tooltip visible). The category seems to magically disappear when the page is closed if there are no Tools added to it.

The scenario can be reproduced by adding 'New Category' and not adding tools to it, then the category gets removed when the dialog is closed. Also, if you have a category that has tools and you at some point remove all tools from the category, the category then gets removed when the dialog is closed. Attached video shows this.

This can be confusing for the user. Maybe give them the ability to remove the category also?