Confusion over categories and tags

I have Microsoft 365 personal (not an Exchange account) and have a number of server side categories and I understand that sync is not possible yet. So I tried to add a local tag with the same name as one of these server side categories but the tag manager refuses with a message that I aready have a tag with that name. The only place that exists for me is on the Outlook server. Does this mean that the taggingI have on Outlook cannot be replicated with local tags on EM Client?
David (EMC v 10.1.4588)