It's pretty obvious what they do if you try:
A separator is not a category, just a visual separator.
Though if you click on it, it will show all categories below it combined (until next separator or the end)
Lets say you wanted to very neatly organize Game mods:
Tixati's general status categories, Seeding/Downloading/Queued etc.
Category1UnrelatedVideos
Separator:"Game mods"
Category2ModsForMinecraft
Category3ModsForFallout
Category4ModsForSkyrim
Separator:"Game Trainers"
Category5TrainerForSkyrim
If you clicked on GameMods separator, you'll see ALL items for categories 2,3,4 together. If you click on GameTrainers, you'll only see one category with trainers because it's the end of the list.
Few notes: Apparently you cannot add the separator as a whole to the Shares tab or copy the magnet-links although the menu is clickable.