I’ll assume you are correct that removing the subcategories would cause a lot of user confusion even though I don’t know what the subcategories are used for or what sort of design is planned to remove the subcategories (e.g., what support it provides legacy users).
The best way to convince the higher ups that something is a bad idea is to show them. Conduct a simple usability test. Since this is more to convince management than help you with design, don’t worry about getting a representative sample (which you may not have a budget for). Instead, focus on getting a credible sample. Consider recruiting volunteers from where you work in order to save time and money. Recruit people from positions that management will recognize as “good with computers.” Could even be developers. Maybe not those working on the site, but maybe they are (if the point is to show the confusion created for expert users). The point is to get users that management cannot dismiss as idiots if (when) they fail.
Select an important task and measures that best illustrate the potential for confusion, and run the usability test. For non-scientific-types, a single video is worth a 1000 numbers, so video the usability test, using your personal smartphone if necessary. Present both the numbers and a selected video or two to management. Emphasize that they’re watching the best most capable users struggle. Point out that if 4 out of 5 (or whatever number) of the best users struggle, then imagine how bad it is for average users. Tie it to revenue, however tenuously you can.
Use the presentation of the results of the usability test to open a dialog on the design --to show that you have "serious concerns about this proposed change," not to show that the managers are a bunch of dumbasses. Use the opportunity to find out what management is trying to accomplish, and be prepared to work with them towards a solution that addresses both yours and their concerns. Give them a way out that saves face.