Amazon isn't good at discerning the various hybrid genres that are becoming increasingly common in self publishing. Of course, some works have always been like that. Andre Norton had a Merlin book out when I was a kid that read a lot like Arthurian fantasy--except that Merlin was an alien. So is that sci-fi or fantasy? Anyway, a lot of sci-fi is called by some critics science fantasy, because the scientific foundation is little more than a pretext. It be hard to find even a theoretical foundation for what happens.
Most plots in science fiction or fantasy could convert rather easily to the other genre. Hostile aliens could become hostile faeries, for example. Alien worlds could be supernatural realms.
To go back to Timothy's original problem, John Conroe (who, when I first started, was one of Amazon's self publishing success stories, has a fairly long series (The Demon Accords), currently at 21 books.
The first book is listed has the following categories.
#303 in Horror Occult & Supernatural
#352 in Occult Horror
#481 in Contemporary Fantasy (Kindle Store)
The last book has different ones.
#2,106 in Science Fiction (Kindle Store)
#3,749 in Fantasy (Books)
#3,896 in Science Fiction (Books)
So Conroe is allowed to have a book in both science fiction and fantasy, but Timothy isn't?
Conroe is a textbook example of blending both genres. Though fantasy predominates in the first few, the blend exists even in those. For instance, vampirism and lycanthropy are both the result of a virus. Later on, a character is introduced who is an unusual strong male witch, with three out of four elemental domains, which hardly anyone ever has. But one of his tricks is an ability to manipulate technology, and in the same novel he is introduced, a female character pops up who, if I remember correctly, partly technological and has nanites that can reprogram things, as well as android-like physical abilities.
Later on, the male witch is trying to keep an evil grimoire, The Book of Deepest Sorrow, out of evil hands, gets attacked by someone who stabs through the book and into him. The book itself dies, but its spirit flows into him. He manages to control it, but somehow (it's been a while, so I forget the exact progression), the book also merges with an AI, which becomes a super AI who regards the male witch as its father. The AI does Ai-type things (like taking control of all the nukes on the planet so that nuclear war becomes impossible and creating tiny drones that can spy on anyone to make sure world governments are being cooperative). By this point, it's pretty hard to separate the scientific from the supernatural.
Oh, and not long after, we get an alien race, the Vorsook, who do alien-type things. But they also have a supernatural origin story. They are "God's eraser," designed to wipe out unsuccessful aspects of creation, but sometimes, they get carried away. While dealing with them, the heroes also develop the idea of opening a portal to drop a nuke into hell so that Satan will stop messing with them.
In other words, Conroe freely mixes the two genres, and Amazon has no problem with this. And he's been successful, so Amazon should know that it doesn't create a misleading customer experience.