Based: Will play these games over and over. Most of the stay installed
Couch co-op: For when friends are coming over and I quickly can pull up my selection of playable games
Need to finish: Things I already played at least halfway through, I'll never give up hope booti g them up again but most of the time I just buy a new game when I'm bored lol
Games I am currently playing are at the top of "recent" anyway. And if I am done with a game I probably won't play again, I set it as hidden.
I want categories like this, but I already have categories for each franchise. Anything that's related to a franchise goes into a category named for that franchise. Even if it's just a game and its soundtrack. That way, everything for a particular game is kept contained and I know what's related to what. If I have a random "dev tools" installer in my library, I figure out what game it's for (thanks to SteamDB.info and it goes into a category along with that game.
I do have a separate category for simulation games, but only because I love simulators and have tons of them. Outside of that, any attempt to make genre categories has just further confused my library. So for not, I just have hundreds of categories for specific games and their included content and/or sequels.
I certainly have categories, but not quite as neat. It's a crazy mix of genre and vibes, and many are in multiple categories.
Finished, RPGs, VN and anime, With Friends Only, Trash, Garbage, Need to finish, low interest, party games, roguelikes, and a few more that I can't remember right now.
I also have a dynamic category for filtering with a specific steam friend when we're figuring out what to play, that filters for multiplayer tags and that they also own. Plus, removed the trash that no one wants to play.
Categories for game series longer than 2 games like Fallout or Elder Scrolls or CoD, the favorites category, one for games that I got free and don't really like but kinda might wanna play again sometime, one category called "Tim Games" because I know a guy named Tim who plays some weird shit so sometimes I get what's on his recent list