Steps to reproduce the issue

Use latest Joomla 5.3, in your template create category html overrides, duplicate the blog layouts and name it let say products. In your category settings set the layout to the custom, in my case product layout from the template

Expected result

The custom layout to be used, whenever, wherever, unless overriden.

Actual result

When you create a menu item for the category as blog layout, the layout is the original blog layout, not the custom.

When you create a categories menu item, but no menu item for the specific category, then the custom layout is used for the specific category when you navigate into it, BUT wrongly it says the category is empty.

System information (as much as possible)

Additional comments