Hi, I’m the main CardDAV developer at FastMail.
We support the Apple (iCloud/iOS) way of doing groups. That is, a group is a separate card of the form:
The decision to implement it this way is more of a practical consideration than anything else - iOS is by far our largest CardDAV client out there, so we need to make sure it works. Our recommended Android client is CalDAV-Sync, which also handles this just fine.
If you can give me information about your CATEGORIES method of implementing groups, I’d be happy to look into it further. Whether we implement it or not will be based on how “standard” it is, how widely deployed it currently is and how sanely it will play with other group schemas and with our web client. Any information or links you can give me that will help inform this decision would be very much appreciated.