Well, about everything from Xbox One was made compatible to the Xbox Series X and S. So i wouldn't be too surprising if it's on there.

I feel like having the Xbox Series X and S as separate categories from the normal Xbox One category would just create an abundance of Xbox categories. Shouldn't the Xbox One category be changed to "Xbox" as fundamentally there is no difference in gameplay between the consoles that would require new categories?

Not like they added all the X360 games on Xbox One (And Xbox Series X/S), or Xbox games on X360... And Xbox One... and Xbox Series X and S...

Or even PS2 games on newer PS3 Models.