What are the purposes of cost center categories?

Comprehensive and Detailed Explanation From SAP S/4HANA Cloud Public Edition, Management Accounting documents:

Cost center categories are used to group cost centers that share similar characteristics and to apply consistent management controls

A primary purpose is to define allowed activities for those cost centers23. For example, the category specifies which activity types—such as labor hours or machine time—can be posted to the group, ensuring that administrative cost centers are not used for production tasks24. Furthermore, categories serve to set default properties for the cost centers assigned to them25. These defaults include control indicators for whether actual costs, commitments, and quantities are allowed, as well as providing a default functional area26. This standardization simplifies the creation and maintenance of cost center master data27. While a category can lock revenue postings (Option A), its broader purpose is control and defaults rather than an absolute prohibition for all similar centers regardless of specific configuration28.