Hello @Tandy R M Silva, Let me assist you with the flow.
Once you enable the CPG option in the MultiVendorX settings submenu, vendors will need to select categories before adding a product from the vendor dashboard. After selecting categories, they will be redirected to the edit product page. In this flow, once a category is assigned to a product, the option to choose categories will not be available on the edit product page in the vendor dashboard.
However, if you do not enable the CPG option, vendors will be able to add categories directly from their edit product page, and this option will remain available even while editing a published product(https://prnt.sc/2WIFbUWD67h0).
Let us know if you need any further assistance from our end.