I have encountered the same thing, only I don’t nest my categories. I have 138 categories and recently noticed this. You can manage categories manually to add or remove by:
1. Assign the category: enter the category name using the Add function in the write post page. It should normally result in an error if you duplicate a category, but it doesn’t.
2. Remove a category: usually the default category. Type it in, hit the add button, and when it shows up at the top of the list checked off? Uncheck it.
Not my favorite way to deal with it, but it does make it possible to assign, reassign, or remove categories while this is resolved.
