@TCATHF said
How do I delete unused [Contact/People] categories in Outlook.com
You can't. Contact/People cats are not the same as Mail cats and Microsoft has not provided any way to manage them.
There is a long thread I've been involved with that offers multiple "solutions" that don't work:
https://learn.microsoft.com/en-sg/answers/questions/4375594/how-to-delete-a-category-in-contacts
All you can do is use the in-App Help -> Feedback -> Make a suggestion, or Vote for and Comment on this existing Feature Request:
Add the ability in New Outlook to Delete a Contact/People Category
https://feedbackportal.microsoft.com/feedback/idea/2af4e80b-beb9-f011-aa43-7c1e526e4a18
(You must "Sign In" at the top right of the Feedback page before you can vote).