When a transaction is set to Transfer, the Exclude from Spending Plan and Reports are both checked.
When you change the category to something else, these are unchecked.
On the Android mobile app, when you change a category and then re-check the Exclude from Reports (all in one go) and then save, the Exclude from Reports selection is not saved and becomes unchecked. You have to go back in and re-check the Exclude from Reports in order to set it back to being excluded.
I feel like when changing the category, these checkboxes becomes unchecked and if you re-check them, those settings should be saved, which is clearly not the case.