Up to 4.7, when filtering by a specific category the post items displayed included also posts from subcategories of the selected category. In 4.7 we introduce the option to restrict the post items to a specific category without displaying posts from its subcategory.
Multi selection is available in the premium widget
Is there a need to filter and select category with multi selection? We support such a feature in our premium widget Term and Category Based Posts Widget. We do this differences because we want a light weight widget with Category Posts Widget. In the most cases filtering and show posts from only one category fits all aims. On the other side our premium widget supports also custom post types. So the aim to select two or more categories, terms, what ever, … is more possible. So the filter UI from the premium widget can takes more time for configuration as the free version it does.