This is a Plus feature which adds a level of navigation to your catalog to make it easy for your supporters to find the items they're most interested in bidding on.
Enabling this option will first display Item Categories in a List Format. Clicking on any category will bring the user to the items within the category, with access to additional filters and a search function.
In the item view, breadcrumbs (Categories / Entertainment / Items without bids) are provided to allow users to easily verify and adjust their filters.
To Enable Browse by Category:
Go to: Admin > Site Settings > Catalog > Navigation and Views > Browse Categories
When enabled, the list of categories becomes the initial landing page for your public catalog:
Clicking on any category in the list will bring the user to the default view of the Catalog - filtered to show all of the items in the selected category: