Think of the Transfers category as an “excluded” category. It’s meant to avoid double counting so if, for example, you have a connected credit card you only account for the transactions once (in the credit card) rather than twice (the credit card payment from Monzo and each individual transaction). The same logic applies to transfers between pots.
If you don’t want it to work like this, just change the category when you transfer money. I think standing orders remember their previous category.
When I order from ASOS and then inevitably send a lot of things back, I use the “Transfers” category to exclude the portion of the transaction I expect to be refunded. That way the “Shopping” category in Trends shows the correct amount.
It would be nice if I could exclude a portion of the transaction without using the Transfers category though as it doesn’t really match the situation.
Or maybe I’m making more work for myself… if I just left the whole thing as Shopping, then when the refund comes in I could also mark that as Shopping and it would balance out? Although ASOS refunds do take a while so the category totals would look wrong for quite a large portion of the month.
The thing that people routinely forget about the Pulse graph is that it was designed for a time when Monzo was a pre-paid card and all spending on it was discretionary. If Monzo differentiated discretionary from mandatory spending properly then, believe it or not, Pulse would actually be a great re-addition to the app. You can assign X pounds to discretionary spending (this is the envelope technique), and then see a handy visualisation of whether you’re spending a bit too quick.