Cue embarrassing moment number… infinite…
Until the post/custom post is actually published, the categories, custom taxonomies, tags, etc.. WILL NOT show up in the list from the menu pane.. this makes sense and is not a plugin issue, its user error issue..
I guess we all have our days. 😉
Sorry about that. I went ahead and tested the other version with a simple post, and am getting the same issuse.. category does not “take” on the post.