Since the Layout Update XML field was changed to a selector in version 2.3.4, it is now required to create a layout file, named specifically for use on a particular Category, CMS, or Product record, and stored on the hosting server. This is a clunky and un-intuitive solution for a few reasons:
1. It requires granting file system access to users who previously only needed admin panel access.
2. It requires creating a file with layout instructions for each individual record. If a common layout instruction is shared between records, this means potentially hundreds of redundant files.
Please consider adding the ability to share Layout Update files between multiple records. That way, only one file is needed if the same layout instructions are applied to multiple categories, and admin panel users could apply those updates to new categories without needing file system access.