You can set a Contact Category Layout at a Global Configuration Level (under Contact -> Category -> Choose a Layout).
You can also set a Contact Category Layout at a Category Level (under Options -> Layout)
But this option is missing at a Menu-Level.
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Looks like this is not a bug, you need to create a new menu type xml to use an alternative category layout, BUT ONLY if that category has a menu item assigned. So I guess intended behavior, but very confusing.
See proofs of user confusion (topics and comments):
https://forum.joomla.org/viewtopic.php?t=750018
https://forum.joomla.org/viewtopic.php?t=844520
Especially this quote sums it up:
Also brought up in: #21800