Menu/Category functionality is bugged?

we are putting together a woocommerce installment for a client. there are a large number of categories and subcategories. he is selling sports equipment. problems started after we had a large number of Categories place in the Main Navigation… in that when making additions under APPEARANCE >> MENUS >> EDIT MENUS, the other tab, MANAGE LOCATIONS, would reset on us everytime we save the menu. when we view the site, it indeed as the SECONDARY menu items in the MAIN NAV location.

now, everytime we add subcategories into the menu, it is deleting main level categories. its almost like we have hit a cap on the number of items permitted in a menu?

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wp 4.0.1
woocommerce plugin
Storefront theme 1.2.1