I have no idea. Just did the same as you and works fine in 3 forums I tested:
- categories and sidebard only:
You should have a issue with your 4.2 theme, which seem to be a modified version of default theme. See:
Categories name is breaking to a new line, even with small names. That doesn't happen with me, as you can see in the first image.
Regarding sidebar categoriesl, it's a contextual sidebar, used in some of the IPS apps too:
if( \IPS\Settings::i()->links_sidebar_index )
{
\IPS\Output::i()->sidebar['contextual'] = \IPS\Theme::i()->getTemplate( 'browse' )->indexSidebar( \IPS\links\Category::canOnAny('add') );
}
You can disable it on:
Unless you have modified styles in the indexSidebar template, I don't see a reason in the script for this to happen. It will be something related to your theme.