Issue: My categories are all imported as 'category:name' instead of 'name'

This is correct behavior. In VaultWiki 3, categories were in the Category namespace, so they all had "Category" before the name. In VaultWiki 4, there are no namespaces, so a category will be imported with a Prefix that has the same text as the old namespace name.

In VaultWiki 4, it is possible to create categories that have any Prefix you want, or no Prefix at all, so the Prefix becomes necessary to identifying the category. This was discussed in some of the videos Claw Snuff posted last year.

OK. that makes sense. Until someone starts using the search bar and types the name of the category. Then the category does not show up as the category name. From an end users perspective its confusing to see the prefix. Especially if there are similar pages or redirect pages. Users will click on those instead of the category page.

Also: how does this work for autolinks? I I want the category name to be autolinked without the prefix, so that if anyone writes the category name there will be an autolink. Is this possible?

If the category name itself is available without the prefix, you can create a synonym that doesn't have the prefix. While it is planned, we have not yet added a setting where you can choose what prefix gets autolinks.