How to create Folder inside Category in SharePoint 2013 Document library

1. Create site content type, you should select the parent content type from: folder content type, parent content type: folder.

2. Go to library->library settings, firstly you should go to advanced settings->check “yes” for “Allow management of content types?” and save changes. After that, you could add and edit the custom content type.

3. In the library settings, you will see the content type settings, you could add the created custom content type by adding from existing site content types.

4. After adding custom content type, you could click the custom content type and add the category column by adding from existing site or list columns.

After those steps, you could create folder from “New Document” in the ribbon and select the custom folder content type. And if you want to add the folder in the specific category, in the category column, you could add specific value.

Regards,
Prasad.