Custom services are great because they can be set on either an agency or system level. This means that agency managers can set them up. This is NOT the case for the new Note categories field, which can only be set in the field editor - and therefore flow across the entire system and can only be set by system admins. This makes no sense. Agency managers are aware of the wide swath of the work that staff do in a much more immediate way than system admins, and need greater flexibility to set these up, rather than a very strict type, system-wide approach.
Furthermore, custom services can be disabled as needed over time. Picklist values like note categories can only be deleted - which is its own problem.
The end result is that we don't use Note categories at all, and therefore can't do any categorical reporting or filtering of Notes.