Yes, the categories automatically switch to a list view when the category count reaches a specific number of categories. The default number for this to happen is 30, so if there are more than 30 categories within your gallery that's why you are seeing it that way.
If you'd like to increase the setting to allow for a larger number of categories before it switches to a list view, you can do that as follows:
Navigate to the Photos » Preferences page.
Click on the "Advanced" button on the top-right side of the page.
Scroll through the preferences until you get to the "Category List View" setting, which is found within the "Navigation" section.
Increase the number found within that setting, and then Save your changes.