In the 'category' query format, the page names are meant to be split up by their first letter, with each letter getting its own header. Unfortunately, this isn't currently working with SMW 1.6 - no letters show up in the headers. I believe that's due to a problem with getSortkey(), which the format uses to get the first letter - it seems to always return a blank value, at least in this case.
I'm setting the severity to 'major' because this is the default query format used by the Semantic Drilldown extension.
Version: unspecified
Severity: major