Solved this one ....
I decided I didn't want to have "unregistered" users be able to view or do anything with the ads. So, I went into the main ad category and unchecked the small boxes at the bottom of the category edit screen giving permissions.
I then noticed the "child" box (see attached pic) for what I assumed was recursive behavior of my change through the sub categories, which of course saves a lot of time editing each category.
Well, clicking that and submitting indeed unchecked ALL the sub category boxes for unregistered members, but it ALSO changed ALL the subcategories to "For Sale" ad types, which of course screwed up any existing ads.
Hence, the reason my "Business" ad above changed status without changing categories.
You know partner ... a manual would really help a lot. I feel like I'm back in the army again doing another 17 years of OJT (on job training) grinding through all the mistakes.