Whilst testing the component I created a top level menu item for the Transifex projects and all worked fine.
Then when completing testing I moved the menu item to a sub-level menu item and immediately started getting 404 errors 'Category not found'.
Moving the menu item back to the top level stopped the problem occuring.
After much search and testing I discovered two resolutions to the problem.
1. Setting the site global configuration to NOT use user friendly URLs, cured the problem but is probably too wide ranging especially since it is only this sole menu item showing the problem.
2. Changing the language code for the menu item to the site language 'en-GB' instead of the default 'All' also resolves the problem.
This has to be ironic since this is a language handling component. Cannot see that this is a CTransifex problem specifically, but considered it worth reporting since I am sure I can't be unique in discovering what is a fairly common 404 error generically.