I had the same issue and after hours on the phone with customer support and no help at all I figured it out. I was getting an error that stated I could not convert bundles into categories. I had no "active" bundles. I changed all the names of the inactive bundles and that doesn't work. You have to go into each bundle, reactivate them along with their sub items. Edit the sub items so that they are not associated with the bundle then inactivate all of them again including the bundle. Super annoying that the system recognizes the inactive bundles and it's associated sub items, but it does and nobody will fix it.