Categories and Items interface allows you to move a category into another category, but then you are unable to view it again and work with it, in either this view or the main gradebook (although the gradebook calculations include the sub-categories, if so set.)

Only workaround I could find was to go into the database and change the parent and path values in mdl_grade_categories back to their original values - need to be able to see and work with sub categories in the gradebook.