Because the first reference to jobcategory is the assignment of the two-character literal value "FA", SAS assigned a length of $2 to the variable. So while the concatenation operator was honored by SAS, it only could fit the first two characters of the result into the variable.
But the new variable jobcategory1 will be assigned a length of $3, since that is the sum of $2 (for jobcategory) and $1 (for joblevel).
BTW, if instead of
jobcategory1=jobcategory||joblevel;
you had used one of the concatenation functions,
jobcategory1=cat(jobcategory,joblevel);
you would get the same resulting values, but SAS would assign a length of $200 to jobcategory.