EP will not create new categories UNLESS the new products in the CSV also describe a NEW category.
If (in the CATEGORIES column) you insert the name of EXISTING categories, then EP will just write the new products' data, and the new products will appear in EXISTING categories.
Try an EP upload with just ONE NEW PRODUCT. Make sure you show an EXISTING category name. Then take a look at the result.
Remember... The category name must EXACTLY match the category name in the database. There is a difference between Mens Shoes and Men's Shoes and mens shoes and men's shoes. Letter case MUST be the same - spelling must be the same.
ALSO... you have posted your question in the EP 1.2.5.4 thread. This version does NOT use CSV but TAB DELIMITED....
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