The reader will list any word in either, so I am not sure why they set it up as two lists.
I've wondered the same thing. Other blogging sites I've used just have one or the other, not both. And really, if you think about it, when you have a public blog, just use good keywords within the post itself. People will find your site through the search engines. I've gained a handful of followers that way. Search engines look at the whole post, not just categories.
I've dropped my category usage since I was just getting spammer follows when I used popular categories and very few others who actually came to my blog from them.