menu links generated into wrong menu

Yes, I confirm that links for nodes are broken. They get saved to an entirely wrong menu - i.e. instead of "navigation" (assume I've selected that) it saves into a menu named "story" (i.e. content type name!), which doesn't show anywhere.

I'm working on a patch right now.

Ok, now I have a patch (internets, try it, it should work - it would be nice if you report back here in any case).

The problem is indeed with menu names: All the links are actually saved to menu system already, but they are almost all saved into wrong menus:
- Visible category and container links: Into selected menu (that's OK)
- Visible node links: Into invisible/wrong menu named by content type (clearly a bug!)
- All invisible links: Into menu 'category-menu-toc-' (code attempts to append container ID to that, but fails - so this is broken too!)

My patch fixes this by correcting the arguments given to category_menu_menu_name(), also adding a second argument to pass the needed $cnid in. (It might be possible to pass just whole $container_settings, or even remove the function altogether, as it seems to be never used outside this part of code, but I aimed for the change to be minimal here.)
Also the category_menu_menu_name() call is centralized to one place for both nodes and categories/containers, as it's the same for both cases after the fix (plus removed one completely unused $container_id variable).
Then, one comment clarification - took me a while to understand, so improving for others to get the point faster.

Also, only after analyzing the code a bit, I understood some limitations, which need to be documented somewhere (the above-mentioned confusing behavior of container settings of content types for menu falls to this realm, most probably, too):
- Each content type may be "owned" by only one container at the same time (after a while of thinking, this is obvious, as you can only have one menu item per path/node without running into all sorts of funny problems). So edit of one container is able to "uncheck boxes" on another container, when it comes to menu links for nodes.
- (only answering the initial post - not really for documentation: Node type settings are, unlike category settings, held in Drupal's variables, rather than the category_menu table.)
- Comments in code indicate further cases, when menu links for nodes are NOT generated (by design):

    // Abort if the content type of this node hasn't got menu links defined.
 
    // Abort if the container linked to this content type doesn't have this
    // content type as an assigned node type (should never be the case).

    // Abort if the container linked to this content type doesn't have
    // menu link generation enabled, or is a multi-parent container.

    // Abort if this node is not tagged with exactly one category from
    // the container linked to this content type.
 
    // Abort if the category that this node is tagged with doesn't have a
    // menu link.

Note that this is the patched version, otherwise the fourth condition said to only have one category on the node - fortunately that only applies to the container with menu links enabled. Additional categories from other containers are no problem.

I don't see why you reverted the issue status etc., but perhaps it was unintentional - I once saw it myself, that this info got changed on preview or something... Now changing the status again, so that it may be properly recognized by the maintainer, and fixed in the official Category code. Only after the patch gets inside, will this be fixed - this is not just a support request, there's a serious bug discovered.

Since #4 confirmed the fix to be working, setting RTBC (patch at #3).

Committed to HEAD. Thanks.

I vaguely remember fixing this problem on one of my sites, in pretty much exactly the same way.. I forgot to commit that fix back (very naughty of me). So, thanks for the patch - it was overdue!