Note: In older versions of Asset Bank 'folders' were called 'access levels'
Categories represent a descriptive hierarchy for simply browsing your assets. They allow users to navigate around and find things. Categories are NOT related to permissions.
Folders are a separate browsable hierarchy that ARE related to permissions.
Groups is the key that links users to folders, e.g. person X will be a member of the Marketing Group and they will as a result see assets in the Marketing folder and any other folders they are allowed to see.
The category structure is simply for organising and browsing it has no relation to permissions. Folders are used to give users permissions on assets (they are still hierarchical and can still be browsed).
By default, Asset Bank will hide any categories from a user if that category contains no assets that they are allowed to see.
E.g. instead of showing these categories to a user:
Fruit (0) Crisps (0) Drinks (7)
It only shows:
This is just to make the site appear more relevant for the particular user. This is not related to permissions.
Note1, admin users always see ALL categories regardless of number of assets within them.
Note 2, uploaders will still see all the category structure at point of upload (i.e. they will be able to upload to currently empty categories).
In newer versions of Asset Bank categories are an optional extra that is hidden by default, most people can make do with the single folder structure to handle both permissions and browsing.