How to make Expenses list show only expenses for Schedule I selected?

I would like to remove unnecessary expense types for my business. I assumed that if Category is not assigned to my schedule, it won't be populated in the list of Business Expenses to choose from like in this example of Cost of Goods Sold:

But it still shows when I want to attribute transactions:

I can't seem to be able to delete these categories either.

What is the way to get it fixed?

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