When configuring your store, you will have the opportunity to create custom categories and select which categories (whether your own custom categories, or Webstore's general categories) you would like to appear in your store. These categories will appear in different ways when listing an item.
Items Listed In "Site": Only Webstore's general categories will appear in the category selection list.
Items Listed In "Store Only": Only your custom categories and specifically selected Webstore categories will appear in the category selection list.
Items Listed In "Both": Only the specific categories which you have selected from Webstore's general category list will appear.