Please have a look at https://jazz.net/library/article/589 especially the image



As you can see there is no direct relationship between the category and the timeline, nor the iteration a work item is filed against. So your second part of question 1 in your comment shows your confusion. Forget timelines if you talk about categories for the moment. The selection of the timeline in the category editor is only to make it easier to find the process area based on filtering their associated timelines. Process area is a general term for team area or project area I use, because they share a lot of things, a project area is like a team area in most properties. The difference is that a project area can not be contained in other process areas. Process area is actually something that exists in the API.

You only associate a category and a process area. At this point, timelines are not relevant at all.



You can associate a category to any process area you want. If a category is created as subcategory of another one, it initially inherits the association to the process area from its parent. But you can override that. Wireless inherits its association from Mobile, but Bongo Drums is overwritten. Please note, inheritance only reflects the process area association.

An given process area can only follow exactly one timeline. By default a team area is set to follow the project timeline. The root team areas directly underneath a project area can have a different timeline associated. Any team area underneath such a root team area shares its timeline.

So if you have a development timeline, you would typically have the project area follow that timeline. Team areas within would follow it too - assuming there is more development than maintenance.
If you want a team area for maintenance, you would create a new root team area that works against the maintenance timeline. If you want sub teams in maintenance, you create them within.

Edit: See the image


Maintenance Team runs on its own timeline, different from the one the project area uses. The sub team Ble can only run on the timeline of the maintenance team. Business Recovery Matters and the other team areas run on the Project Area Timeline and their sub team areas run on the ones chosen in the root team area as well.

With respect to category-team area-timeline, the UI allows you to choose a category for a work item. Once you have chosen that, you probably should only be able to choose an iteration from the timeline the associated team area works against. However, the UI allows you to pick other iterations, which does not make a lot of sense from a planning perspective. There is an enhancement request.

Please see https://jazz.net/library/article/589 for an overview how this works.
A project are or team area can always only work against a single timeline. I think the sample app does a reasonably good job in showing how that would be set up.

If you do development with some teams and maintenance with others, the development teams would be at the development timeline and the maintenance teams on the maintenance timeline. They could be the same, if the rhythms are the same. I would split them for clarity however.

Name the iterations in a reasonable identifiable way.

Development
-- Release 1
---- M1 (R1)
-------- Iteration 1 (M1 R1)
-------- Iteration 2 (M1 R1)
---- M2 (R1)
-------- Iteration 1 (M2 R1)
-------- Iteration 2 (M2 R1)

 and so forth.