J-BusinessDirectory - displaying subcategories

I am trying to follow these instructions but cannot find where to do that. "for displaying subcategories, you can choose the category menu item type and set the parent category id on the menu item settings"

I would like to be able to do what is shown here:  https://www.discoverballina.com.au/visit/see-do/eats-bars

The user sees images of subcategories that can be used to drill down to listings.

This is a custom page with the links set manually. You can also develop a custom page and copy the link to the category search results.

what was meant by "for displaying subcategories, you can choose the category menu item type and set the parent category id on the menu item settings"?