Categories field doesn't get updated with new information

My boss had me import our contacts from our database as a .csv file into
separate sub-folders under my Contacts folder, according to categories which
I added to my master list (shareholder, staff, board member, etc.). We did
this so I could export them in groups as .pst files.

Later he asked me to consolidate the contacts, i.e., add the other
categories for those contacts that are, for example, shareholder and staff,
instead of having a contact in one folder as shareholder and in another
folder as staff. I did that, but when I move one of the updated ones that
should show 2 or 3 categories, and Outlook asks me if I want to update the
existing one with the new information in the contact I am moving in there and
I say yes, it doesn't change the category from simply "staff" or
"shareholder" or whatever was in that one. If I change other information,
such as address, it does update the one with that info but still not with the
category info. And it doesn't matter if I just choose one category from the
(real) master list either. The categories do not change no matter what I do.
Is this normal?

Thanks,