diff --git a/packages/block-editor/src/components/inserter/block-types-tab.js b/packages/block-editor/src/components/inserter/block-types-tab.js
index 3b2ab959e3ef9..94b76b02ac694 100644
--- a/packages/block-editor/src/components/inserter/block-types-tab.js
+++ b/packages/block-editor/src/components/inserter/block-types-tab.js
@@ -7,15 +7,12 @@ import { map, findIndex, flow, sortBy, groupBy, orderBy } from 'lodash';
  * WordPress dependencies
  */
 import { __, _x } from '@wordpress/i18n';
-import { store as blocksStore } from '@wordpress/blocks';
 import { useMemo, useEffect } from '@wordpress/element';
-import { useSelect } from '@wordpress/data';
 
 /**
  * Internal dependencies
  */
 import BlockTypesList from '../block-types-list';
-import ChildBlocks from './child-blocks';
 import InserterPanel from './panel';
 import useBlockTypesState from './hooks/use-block-types-state';
 
@@ -34,17 +31,6 @@ export function BlockTypesTab( {
 		onInsert
 	);
 
-	const hasChildItems = useSelect(
-		( select ) => {
-			const { getBlockName } = select( 'core/block-editor' );
-			const { getChildBlockNames } = select( blocksStore );
-			const rootBlockName = getBlockName( rootClientId );
-
-			return !! getChildBlockNames( rootBlockName ).length;
-		},
-		[ rootClientId ]
-	);
-
 	const suggestedItems = useMemo( () => {
 		return orderBy( items, [ 'frecency' ], [ 'desc' ] ).slice(
 			0,
@@ -94,56 +80,39 @@ export function BlockTypesTab( {
 
 	return (
 		<div>
-			{ hasChildItems && (
-				<ChildBlocks rootClientId={ rootClientId }>
+			{ showMostUsedBlocks && !! suggestedItems.length && (
+				<InserterPanel title={ _x( 'Most used', 'blocks' ) }>
 					<BlockTypesList
-						// Pass along every block, as useBlockTypesState() and
-						// getInserterItems() will have already filtered out
-						// non-child blocks.
-						items={ items }
+						items={ suggestedItems }
 						onSelect={ onSelectItem }
 						onHover={ onHover }
-						label={ __( 'Child Blocks' ) }
+						label={ _x( 'Most used', 'blocks' ) }
 					/>
-				</ChildBlocks>
+				</InserterPanel>
 			) }
 
-			{ showMostUsedBlocks &&
-				! hasChildItems &&
-				!! suggestedItems.length && (
-					<InserterPanel title={ _x( 'Most used', 'blocks' ) }>
+			{ map( categories, ( category ) => {
+				const categoryItems = itemsPerCategory[ category.slug ];
+				if ( ! categoryItems || ! categoryItems.length ) {
+					return null;
+				}
+				return (
+					<InserterPanel
+						key={ category.slug }
+						title={ category.title }
+						icon={ category.icon }
+					>
 						<BlockTypesList
-							items={ suggestedItems }
+							items={ categoryItems }
 							onSelect={ onSelectItem }
 							onHover={ onHover }
-							label={ _x( 'Most used', 'blocks' ) }
+							label={ category.title }
 						/>
 					</InserterPanel>
-				) }
-
-			{ ! hasChildItems &&
-				map( categories, ( category ) => {
-					const categoryItems = itemsPerCategory[ category.slug ];
-					if ( ! categoryItems || ! categoryItems.length ) {
-						return null;
-					}
-					return (
-						<InserterPanel
-							key={ category.slug }
-							title={ category.title }
-							icon={ category.icon }
-						>
-							<BlockTypesList
-								items={ categoryItems }
-								onSelect={ onSelectItem }
-								onHover={ onHover }
-								label={ category.title }
-							/>
-						</InserterPanel>
-					);
-				} ) }
-
-			{ ! hasChildItems && !! uncategorizedItems.length && (
+				);
+			} ) }
+
+			{ ! uncategorizedItems.length && (
 				<InserterPanel
 					className="block-editor-inserter__uncategorized-blocks-panel"
 					title={ __( 'Uncategorized' ) }
@@ -157,28 +126,27 @@ export function BlockTypesTab( {
 				</InserterPanel>
 			) }
 
-			{ ! hasChildItems &&
-				map( collections, ( collection, namespace ) => {
-					const collectionItems = itemsPerCollection[ namespace ];
-					if ( ! collectionItems || ! collectionItems.length ) {
-						return null;
-					}
-
-					return (
-						<InserterPanel
-							key={ namespace }
-							title={ collection.title }
-							icon={ collection.icon }
-						>
-							<BlockTypesList
-								items={ collectionItems }
-								onSelect={ onSelectItem }
-								onHover={ onHover }
-								label={ collection.title }
-							/>
-						</InserterPanel>
-					);
-				} ) }
+			{ map( collections, ( collection, namespace ) => {
+				const collectionItems = itemsPerCollection[ namespace ];
+				if ( ! collectionItems || ! collectionItems.length ) {
+					return null;
+				}
+
+				return (
+					<InserterPanel
+						key={ namespace }
+						title={ collection.title }
+						icon={ collection.icon }
+					>
+						<BlockTypesList
+							items={ collectionItems }
+							onSelect={ onSelectItem }
+							onHover={ onHover }
+							label={ collection.title }
+						/>
+					</InserterPanel>
+				);
+			} ) }
 		</div>
 	);
 }
diff --git a/packages/block-editor/src/components/inserter/child-blocks.js b/packages/block-editor/src/components/inserter/child-blocks.js
deleted file mode 100644
index 6e18131954b9d..0000000000000
--- a/packages/block-editor/src/components/inserter/child-blocks.js
+++ /dev/null
@@ -1,35 +0,0 @@
-/**
- * WordPress dependencies
- */
-import { store as blocksStore } from '@wordpress/blocks';
-import { useSelect } from '@wordpress/data';
-
-/**
- * Internal dependencies
- */
-import BlockIcon from '../block-icon';
-
-export default function ChildBlocks( { rootClientId, children } ) {
-	const { rootBlockTitle, rootBlockIcon } = useSelect( ( select ) => {
-		const { getBlockType } = select( blocksStore );
-		const { getBlockName } = select( 'core/block-editor' );
-		const rootBlockName = getBlockName( rootClientId );
-		const rootBlockType = getBlockType( rootBlockName );
-		return {
-			rootBlockTitle: rootBlockType && rootBlockType.title,
-			rootBlockIcon: rootBlockType && rootBlockType.icon,
-		};
-	} );
-
-	return (
-		<div className="block-editor-inserter__child-blocks">
-			{ ( rootBlockIcon || rootBlockTitle ) && (
-				<div className="block-editor-inserter__parent-block-header">
-					<BlockIcon icon={ rootBlockIcon } showColors />
-					{ rootBlockTitle && <h2>{ rootBlockTitle }</h2> }
-				</div>
-			) }
-			{ children }
-		</div>
-	);
-}
diff --git a/packages/block-editor/src/components/inserter/test/block-types-tab.js b/packages/block-editor/src/components/inserter/test/block-types-tab.js
index 2e0d465ce9f41..22e5f9bf81e7b 100644
--- a/packages/block-editor/src/components/inserter/test/block-types-tab.js
+++ b/packages/block-editor/src/components/inserter/test/block-types-tab.js
@@ -7,7 +7,6 @@ import { render, fireEvent } from '@testing-library/react';
  * WordPress dependencies
  */
 import { registerBlockType, unregisterBlockType } from '@wordpress/blocks';
-import { useSelect } from '@wordpress/data';
 
 /**
  * Internal dependencies
@@ -80,8 +79,6 @@ describe( 'InserterMenu', () => {
 			categories,
 			collections,
 		] );
-
-		useSelect.mockImplementation( () => false );
 	} );
 
 	it( 'should show nothing if there are no items', () => {
@@ -138,18 +135,6 @@ describe( 'InserterMenu', () => {
 		expect( blocks[ 2 ].textContent ).toBe( 'Some Other Block' );
 	} );
 
-	it( 'displays child blocks UI when root block has child blocks', () => {
-		useSelect.mockImplementation( () => true );
-
-		const { container } = render( <InserterBlockList /> );
-
-		const childBlocksContent = container.querySelector(
-			'.block-editor-inserter__child-blocks'
-		);
-
-		expect( childBlocksContent ).not.toBeNull();
-	} );
-
 	it( 'should disable items with `isDisabled`', () => {
 		const { container } = initializeAllClosedMenuState();
 		const layoutTabContent = container.querySelectorAll(
diff --git a/packages/e2e-tests/specs/widgets/adding-widgets.test.js b/packages/e2e-tests/specs/widgets/adding-widgets.test.js
index 0123fab09fe86..657fb46d80104 100644
--- a/packages/e2e-tests/specs/widgets/adding-widgets.test.js
+++ b/packages/e2e-tests/specs/widgets/adding-widgets.test.js
@@ -52,6 +52,11 @@ describe( 'Widgets screen', () => {
 		const blockLibrary = await page.waitForSelector(
 			'[aria-label="Block Library"][role="region"]'
 		);
+
+		// Check that there are categorizations in the inserter (#26329).
+		const categoryHeader = await blockLibrary.$$( 'h2' );
+		expect( categoryHeader.length > 0 ).toBe( true );
+
 		const [ addParagraphBlock ] = await blockLibrary.$x(
 			'//*[@role="option"][*[text()="Paragraph"]]'
 		);