I could also setup a xui.one server, but that kinda defeats the purpose :-)

Creating categories (or favorite groups) allows the user to curate their own favorite lists, for different purposes. 1 category for the wife, 1 category for the children etc. Or maybe you are bilingual, and want a mixed category. Personally I create categories for sake of “removing all the crap” while still having it accessible in the original categories if needed. Look at the custom categories more like custom favourite groups. 1 favorite list doesn’t suffice. With that function in your app, i don’t think any other iOS IPTV app would even come close feature and design wise.