Information needed on setting up spend classification

Hi Team, we need to create a custom data set for spend classification for our client. I have some questions regarding this. Can someone please help with suggestions / pointers?

1: What is the difference between a Custom Category Code3 and Custom Auto Code3 in data sets?

2: Why the datasets with classification type are not coming in Knowledge base?

3: While creating dataset, I am getting this error - "Enter atleast two category suggestions in training set".

What does this error mean?

Also, can someone please point me to reference document on this topic, that will be very helpful.

Thank you.