I’ve done a lot of reading about this issue today, including articles dating back over 7 years. I can’t believe this issue hasn’t been addressed in the WordPress Core. What’s even more baffling is this is the first time I’ve come upon this issue, and I use the:
/%category%/%postname%/
…Custom Permalink Structure, on just about every website I set up. This is the first time I’ve had an issue.
This certainly doesn’t appear to be a theme issue, so you are welcome to close this as resolved.
For historical purposes, anyone else who stumbles on this issue, take a look at: https://wordpress.org/plugins/fv-top-level-cats/