Hello @Greaves
As long as everything has been set up correctly, it shouldn't be pulling inactive categories. However, it can be difficult to resolve SIS sync issues without looking at the specifics of the course in Canvas and in Powerschool. I would advise speaking with Canvas Support directly. If others have seen this and have suggestions, that is great but it is very often a case by case scenario.
Because of the complexity of the issue, and the concerns for privacy, it would be best if you contacted Canvas Support directly to pinpoint the source of the issue and provide a resolution:
How do I contact Canvas Support? - Instructure Community