I'm on Cubase 12 and got Melodyne VST3 sitting in the 'Other' plugin category/folder and wanna move it to the 'Vocals' category/folder. I couldn't figure out how to do that. Is it not possible?

 

Use the plugin manager, and sort them how you like. Under Studio/VST plugin Manager

 

I already tried that but when I try to drag the Melodyne plugin from 'Other' category to anywhere else I'll just get a 'forbidden' street sign icon, so I can't drop it in the category/folder I want it in. What am I doing wrong?

 

Once you open the plugin manager the first thing to do is to use the little white arrow at the top Right Hand side and select create new collection, select add all plugins. Then sort to your hearts content. You can create additional folders here as well.