New: We have improved categorization for Google Shopping! The drop down will now show you relevant suggestions for your filter values. Read more about it here.
What are the downsides of 'auto-generated' categories?
The categorization in your feed might be very specific. If this is the case, the generate categories functionality might exceed the maximum number of generated categories (which is 20 pages). However, usually the categorization tree for the platform you're trying to send your items to is often less specific than your own categorization.
What we see often is that users set a lot of rules to send many very specific categories to the same category of the export platform. This can cause a lot of unnecessary extra work. In addition to the extra work, completing 20 pages of generated categories probably won't categorize 100% of your items, as the maximum capacity will have been exceeded.
Instead of blindly matching all of your very specific categories to the same (less-specific) category on the export platform, look for keywords that appear in multiple categories and use the "contains" filter to categorize them. The image below depicts an example of this tip in action.