diff --git a/src/tagstudio/qt/controllers/edit_tag_panel.py b/src/tagstudio/qt/controllers/edit_tag_panel.py
index 0fdd9fbc5..51248f7b0 100644
--- a/src/tagstudio/qt/controllers/edit_tag_panel.py
+++ b/src/tagstudio/qt/controllers/edit_tag_panel.py
@@ -330,7 +330,7 @@ def _build_parent_row_widget(self, tag: Tag, parent_id: int, is_disambiguation:
         capsule.set_text(self._lib.tag_display_name(tag))
         capsule.set_color_group(tag.color)
         capsule.on_remove.connect(lambda t=parent_id: self._remove_parent_tag_callback(t))
-        capsule.on_edit.connect(partial(self._edit_tag, tag, self._set_parent_tags))
+        capsule.on_edit.connect(partial(self._edit_tag, tag, self._on_parent_tag_edited))
 
         row.addWidget(capsule)
 
@@ -350,6 +350,11 @@ def _build_parent_row_widget(self, tag: Tag, parent_id: int, is_disambiguation:
 
         return capsule.layout().button, disam_button, container
 
+    def _on_parent_tag_edited(self) -> None:
+        # A parent's own parents determine which categories this tag inherits.
+        self._set_parent_tags()
+        self._set_categories()
+
     def _toggle_disam_id(self, disambiguation_id: int | None):
         if self._disambiguation_id == disambiguation_id:
             self._disambiguation_id = None
diff --git a/tests/qt/test_edit_tag_panel.py b/tests/qt/test_edit_tag_panel.py
index 5501b504d..e517378a3 100644
--- a/tests/qt/test_edit_tag_panel.py
+++ b/tests/qt/test_edit_tag_panel.py
@@ -7,6 +7,7 @@
 from collections.abc import Callable
 from typing import cast
 
+import pytest
 from PySide6.QtWidgets import QCheckBox
 from pytestqt.qtbot import QtBot
 
@@ -16,6 +17,7 @@
 from tagstudio.i18n.translations import Translations
 from tagstudio.qt.controllers.capsule import Capsule
 from tagstudio.qt.controllers.edit_tag_panel import CustomTableItem, EditTagPanel
+from tagstudio.qt.controllers.modal import Modal
 from tagstudio.qt.qt_driver import QtDriver
 
 
@@ -573,6 +575,70 @@ def test_edit_tag_panel_remove_category_inherited_directly_and_indirectly(
     assert capsule is None
 
 
+def test_edit_tag_panel_add_category_by_editing_parent(
+    qtbot: QtBot,
+    library: Library,
+    generate_tag: Callable[..., Tag],
+    monkeypatch: pytest.MonkeyPatch,
+):
+    category = unwrap(library.add_tag(generate_tag("category", id=122, is_category=True)))
+    parent = unwrap(library.add_tag(generate_tag("parent", id=123)))
+    child = unwrap(library.add_tag(generate_tag("child", id=124, parent_tags={parent})))
+
+    panel: EditTagPanel = EditTagPanel(library, child)
+    qtbot.addWidget(panel)
+
+    assert _find_category_capsule(panel) is None
+
+    modal = _open_parent_edit_modal(panel, monkeypatch)
+    nested_panel = cast(EditTagPanel, modal.layout().content_widget)
+    nested_panel._add_parent_tag_callback(category.id)
+    modal.saved.emit()
+
+    capsule = _find_category_capsule(panel)
+    assert capsule is not None
+    assert capsule.layout().button.text() == category.name
+
+
+def test_edit_tag_panel_remove_category_by_editing_parent(
+    qtbot: QtBot,
+    library: Library,
+    generate_tag: Callable[..., Tag],
+    monkeypatch: pytest.MonkeyPatch,
+):
+    category = unwrap(library.add_tag(generate_tag("category", id=122, is_category=True)))
+    parent = unwrap(library.add_tag(generate_tag("parent", id=123, parent_tags={category})))
+    child = unwrap(library.add_tag(generate_tag("child", id=124, parent_tags={parent})))
+
+    panel: EditTagPanel = EditTagPanel(library, child)
+    qtbot.addWidget(panel)
+
+    capsule = _find_category_capsule(panel)
+    assert capsule is not None
+    assert capsule.layout().button.text() == category.name
+
+    modal = _open_parent_edit_modal(panel, monkeypatch)
+    nested_panel = cast(EditTagPanel, modal.layout().content_widget)
+    nested_panel._remove_parent_tag_callback(category.id)
+    modal.saved.emit()
+
+    assert _find_category_capsule(panel) is None
+
+
+def _open_parent_edit_modal(panel: EditTagPanel, monkeypatch: pytest.MonkeyPatch) -> Modal:
+    """Click "Edit" on the first parent tag and return the nested modal it opens."""
+    shown: list[Modal] = []
+    monkeypatch.setattr(Modal, "show", lambda self: shown.append(self))  # pyright: ignore
+
+    parent_rows = panel.layout().parent_tags_scroll_layout.itemAt(0).widget().layout()
+    capsule = parent_rows.itemAt(0).widget().layout().itemAt(0).widget()
+    assert isinstance(capsule, Capsule)
+    capsule.on_edit.emit()
+
+    assert len(shown) == 1
+    return shown[0]
+
+
 def _find_category_capsule(panel: EditTagPanel, index: int = 0) -> Capsule | None:
     item = panel.layout().category_scroll_layout.itemAt(0).widget().layout().itemAt(index)
     while item is not None: