First you must create a category (see the snapshot), after that you can add this category in
appearance>menu (see another snapshot) and that should be it. The selected layout should be shown in your blog page.
If you want to change slug, you must set your permalinks to /%category%/%postname%/ and then put a period/dot into the Category base form (see another snapshot), this will remove category from the slug.
While this trick currently works, there’s no telling if it will work in the future.