For anyone else that struggles with this, this answer was from eBay_DTS_Shruti on ebay https://go.developer.ebay.com/developers/ebay/forums/ebay-apis-selling/additem-fails-only-my-custom-categories#answer-332698
And fixes the issue.
R
The reason your AddFixedPriceItem fails is that you are specifying the StoreCategoryID in the wrong tag.
The PrimaryCategoryID (http://developer.ebay.com/DevZone/XML/docs/Reference/ebay/AddFixedPriceI...) should contain the eBay CategoryID and the Custom Store categoryID should be specified in the StoreCategoryID
It should look something like this in the request:
<Storefront>
<StoreCategoryID>2328253017</StoreCategoryID>
<StoreCategory2ID>0</StoreCategory2ID>
</Storefront>
Note that you need to specify both the Actual eBay Category and the StoreCategory in the AddFixedPriceItem request.
Hope this helps.