Permalink Redirects

I have a problem on a new site - with sub-categories not displaying the content of that sub-category

Using the permalink
/%category%/%postname%/

and for example, categories as category-1/sub-category2/
The URL posts display okay
category-1/sub-category2/post-name/

BUT - the permalink in the post contains a breadcrumb pointing to
category-1/sub-category2/
And this displays as 'page not found'

BUT - the .domain/sub-category2/ does display the content of that sub-category.

How do I get the following to display the contents of the sub-catgeory?
/category-1/sub-category2/