Oh boy there are lots of problems here

On a clean site

Create several top level categories - not in alphabetical order
Create menu item - list all categories
set the top level to root
Set Empty Categories - Show
Display Categories in alphabetical order

• Not possible - there is no option for the list - it can only be in the category ordering

Create new top level category
Move all existing categories to child of new category
Refresh front end
Click on top level Category name
->expected result - list of subcategories
->actual result - no articles to display and Subcategories title
click on +
->expected result - list of subcategories
->actual result - list of subcategories

now create an article in each category
refresh front end
Article count 0
->expected result count of all articles in the category and its children

Now click on one of the subcategories
You have a blog view of the articles
BUT the menu also has options for configuring a list layout

• Not possible to use a list layout instead of a blog layout