Pulling from the FSE Outreach Program's Final Touches call for testing:

I see that I can add a category, but I can not see which categories already exist. As I might want to place this into a pre existing category.

Right now, this flow acts more as tags than categories to reuse what's shown in the Post Editor:

I think we should consider having some consistency here and show a list of categories to pick from, especially since the intent is that this will improve organization. Curious for design feedback first though :)