What does "Migrate Source Store categories into Shopify Automated Collections" option do?
Please, note that Shopify has a specific system of categories and subcategories. The categories are called collections and subcategories are organized according to product tags. Collections are of two kinds - manual and automated.
Additional option “Migrate Source Store categories into Shopify Automated Collections” will guarantee that your product categories will be transferred to automated (smart) collections, the products will receive tags and will be arranged to the corresponding collections with all the relations between subcategories of the source store preserved.
While migrating product categories and subcategories to Shopify it is advisable to choose this additional option as it saves you much time and effort of arranging all the tags into collections manually. If you do not choose this option the categories of the first level will migrate into collections and the products will receive tags and will not be arranged according to the subcategories of the source store. Learn more about what product collections are, how to create and edit them by reading Shopify documentation.