Image for categories are set from the media library.
Go to Media Library, (the Media tab on the right).
Upload or select an image.
Look on the right hand side.
There’s a Catagories option.
Select the category you would like it to be the image for.
Remember that you might have tounselect the old picture for the new one to appear.
(It’s set differently from the other pages or posts, like a blog post for example, because they are categories which are used to organize multiple pages or posts – not just individual pages or posts themselves.)