I found the way to do it! (Cheer myself! )

It's under "Chart of accounts" and not under "Products and Services" as shown in the guide.

I deactivated all the categories I don't need to make it easier to find categories in the dropdown.

I can also edit the categories from here.

One thing I'm confused about is if I select "Created by you" from the dropdown, I see loads of categories I never created.