Hi,
You don't need to create a module for every sub-category in a category listing module.
When you create a new category listing module, the system should actually generate automatically the associated menu item that is necessary for the display of the products when you click on a category displayed in the module.
So there shouldn't be the need to do any complex setup. But then, if you messed with the settings, it might be better starting afresh and creating a new category listing module so that the system can regenerate the settings of the associated menu item properly.
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