You can add products in as many categories as you wish, however, each item must be listed separately in each individual category/sub-category.
Our suggestion would be to have several different photos for each category you choose, that way a customer is not scrolling through your listings and see the same product many times.
Handmade Guild offers visitors the option to see new arrivals, if a customer visits this page and sees the same photo and/or product, they might not click on it because of it's repetative nature. Having different photos will entice buyers to keep looking and possibly make a sale.