IIRC at least one category in each project was always required.

See http://www.mantisbt.org/manual/manual.installation.php when it says:

6. Login to your bugtracker and go to the manage section. Click on the
   projects link. You will need to ADD a new project. Then EDIT the new project
   and remember to ADD at least one category. Otherwise you won't be able to add
   any bug reports.

Am I missing something?

well, up to 1.1.0a2 the category field of a new issues was not mandatory! After switching back to 1.1.0a2 my users could enter issues again.

So you could get around without creating catergories for each project.

Maybe (for compatibility issue) we can add with auto script to add a single category to all projects that has NO categories???

or maybe make the mandatory fields configurable?

If you set the following configuration option, it will not be required for users to select a category:

# Default bug category when reporting a new bug
$g_default_bug_category = 'none';

You can also apply the following change to core/print_api.php: print_category_option_list()

After:

    for ($i=0;$i<$category_count;$i++) {
        $row = db_fetch_array( $result );
        $cat_arr[] = string_attribute( $row['category'] );
    }

Add:

    # Add the default option if not in the list retrieved from DB       
    # This is useful for default categories and when updating an
    # issue with a deleted category.
    if ( !in_array( $p_category, $cat_arr ) ) {
        $cat_arr[] = $p_category;
    }