Separate expense and income categories.
Currently both income and expense related categories are shown in the same list. It becomes difficult to differentiate the two if you have categories of the same name but one is linked to expenses and the other income. Also when choosing categories/subcategories to tag transactions, they could be limited to only show income or expense categories based on the transaction being logged as income or expense.
There should NOT be separate income and expense categories.
Even though some categories could be characterized as income or expense by default, e.g. a salary is by default an income category, most of all other categories can be both "income" AND "expense" at the same time.
For example, "Clothing" can belong to the expense category, as we usually buy clothes, but at the same time when you return something and receive a refund, this should actually credit the "Clothing" category so in this case the "Clothing" category should be considered in the income group.
Richard Heider commented
I think this is trickier then it sounds, since you may also have income on expense accounts (e.g. refunds). Since accounts are hierarchical, a work around would be to implement that yourself by structuring your accounts‽