Can you post your public link again?
When you create a product and add it to various categories, that won’t duplicate the number of products just by being in more categories - those are simply references to the same product.
Items are each and every single addition to the CMS collections. 1 blog post, 1 tag, 1 shop item etc all contribute to the item count. Stuff inside the items (like images, text, whatever) does not.
That means having a collection with one sweater in it takes up 1 item, even if it has a list field inside it with all available colors. Adding six sweaters, one per color, takes up 6 items.
how skus will work then