I hear you.  For me it is fixed as I can categorize my transactions and change the item category away from the 'PayPal' Item thing via going to details and then changing it.  It does work although they changed it a bit from how I had been doing it before, which is ok as long as it works as far as I'm concerned.  

Overall I'm with you, though.  I've been pretty frustrated with Intuit in general lately.  This was several months of not being able to do what I need to do in the program that I'm paying for and without any real help from support.  There are several other minor things that feel like bugs to me but aren't major (I get an 'are you sure you want to change the amount by $0' dialog every time I press to accept a transaction even though I haven't actually changed the amount for example). 

Then nothing to do with QB but Intuit, I used Mint for years and recently they just pushed everything over to CreditKarma.  Again, not a big deal as I understand that in software things merge and change, but got my data over and figured out that there are several very key things missing in CK from Mint (i.e. you can't have a second home listed or ignore certain accounts from a bank you are connected to).  

Anyway, overall I've been pretty unimpressed with Intuit lately and am seriously thinking about looking at what else is out there.