Note: I've reported this upstream to xdg-list, but got no responses
there about where to report desktop-file-utils bugs, so I'll try my
luck here.

Even in the latest (upstream) CVS HEAD of desktop-file-utils,
"desktop-file-install --remove-category ..." fails to remove the last
category.

Reproducer using the emacs desktop entry from FC2:

  $ cd /tmp
  $ grep Categories /usr/share/applications/gnu-emacs.desktop
  Categories=TextEditor;Development;X-Red-Hat-Base;Application;
  $ desktop-file-install --vendor foo --dir $PWD \
    --remove-category Application \
    /usr/share/applications/gnu-emacs.desktop &>/dev/null
  $ grep Categories ./foo-gnu-emacs.desktop
  Categories=TextEditor;Development;X-Red-Hat-Base;Application;

Expected:

  Categories=TextEditor;Development;X-Red-Hat-Base;