Thank you for posting in the Seller Community. Welcome!
Do you get a "delete" option after clicking on the three dots next to the category?
The other way I would think of is by going to your dashboard through squareup.com and selecting Online Store > Items > Categories > Select the category > Click on "delete" in the top right-hand corner.
Hope this helps. Please let me know if you have any other questions by replying to this thread.