stilllearnin Doing it by categories is better because it means you don't repeat stuff all over the house - which adds to the clutter. It doesn't seem like it'd make a difference overall, but actually it does...
So putting all your sellotape in kitchen drawer means you always know where to find it and stops you having some in the kitchen, bedroom, office, art drawer, with wrapping paper... or going and buying more because you can't find it when you need it. It also shows that you've had 20 rolls cluttering up various corners of your house!
Also putting e.g. shoes in 1 place (instead of some in bedroom, cupboards, shoe boxes in hall etc), lets you see what you've duplicated & how many of an item you have. So you realise that whilst you always feel you 'never have any nice shoes' you actually have 6 pairs of fairly worn out black shoes, but none are quite right so you keep buying more - but because they've been stored in hall, loft, car boot, gym bag and a cupboard that you'd forgotten about etc you never realised you had so many.
It also lets you see gaps in what you own, so you realise you keep buying more black shoes, but actually now you've organised your clothes to what you actually wear and like (that 'spark joy' you can see a pair of boots would pull a lot of outfits together.
I'm sure someone more eloquent will be able to improve on what I've said, or add anything I've forgotten, but I hope that helps. :)
[disclaimer - I don't actually own any black shoes, but trainers may be another story...]