Hello,
yes that's a good point, now that I look in the backend, it look a little bit confusing.
from what I understand, in Myblog you can Select one or more sections to be managed using MyBlog. Then u choose the name of one section ( it has only 1 category, by default is myblog) where u want to store new entries. At the end, seem like all sections managed by myblog are store in 1 single section with one single category (by default Myblog)
by the way: here something I found from the jomsocial forum:
MyBlog will create an article section called 'MyBlog'. You can treat this like the Joomla's built-in articles component. You can create categories under MyBlog section. You can also set the permission to 'public', 'registered' or 'special' just like any other article's section and category.
Not sure if this help