I'm fuzzy on what difference it makes if you are in category 2 or 3 when flying over people.
It depends on the Kinetci Energy of the aircraft and RID requirements:
Ops over People, Category 2:
The PIC must use an aircraft that:
•Possesses a Declaration of Compliance.
•Does not transfer more than 11 ft/lbs of KE.
•Has no rotating parts that lacerate skin.
•Does not contain any safety defects.
•No sustained flights over open air assemblies w/o RID (concerts, construction sites, etc.).
•Labeled as such.
•Maintained records & instructions.
•Implementation date is dependent on when manufacturers can get their Declaration of Compliance approved.
•They can start submitting them 9-12 months after 4/16/21.
Ops over People, Category 3:
The PIC must use an aircraft that:
•Possesses a Declaration of Compliance.
•Does not transfer more than 25 ft/lbs of KE.
•Has no rotating parts that lacerate skin.
•Does not contain any safety defects.
•Labeled as such.
•Maintained records & instructions
•The PIC may not fly above open air assemblies.
•May only operate over people if:
•On a closed-site with notice given, or
•If person is directly part of the operation, or
•Under shelter or stationary vehicle.
•There is no RID requirement for this category.
Category 2 & 3 don' really matter right now because none can have a Declaration of Compliance any time soon. It's a moot point for probably another year or so.