When you have set to Show categories in Appearance > Customize > WooCommerce > Product Catalog, both parent and child products should be displayed. If yours doesn’t, can you temporarily switch to a default theme like Storefront, and check if you still have the same issue?

We’ve not heard back from you in a while, so I’m marking this thread as resolved. Hopefully, you were able to find a solution to your problem! If you have further questions, please feel free to open a new topic.