It would ideally work similarly to the Toy Box dynamic category, where clicking on "Appearences" creates a dropdown of categories containing uncollected appearences.

IE. to see what appreances you have left to get from vendors you would click Appearences>Vendors to open a list of zones with relevant vendors, as opposed to getting that same information currently needs opening (for example) Outdoor Zones>Kalimdor>Darnassus>Vendors, then opening Zones>Kalimdor>Orgrimmar>Vendors, repeating for each zone

It's a good idea, but compared to other categories (Toys/Mounts/etc.) the number of Appearances available that would need to be put into the Dynamic group would be quite large. I attempted a similar Dynamic group with Quests and it couldn't even complete and timed out using the current logic.

Currently your best option to simplify your lists to look for 'Vendors' or other specific groups would be to make a new ATT Profile to track only Appearances.

Potentially in the future I'll come up with a better way to capture Dynamic groups of large sets of Things (Appearances & Quests) in this way since it does have some neat potential.

Ahh, I didnt even consider the timeout issue. A potential fix for future (that might introduce new and interesting problems) could be for each category to have flags for each category of "things" would be displayed under it, so when activating say, a dynamic category for appearences, all it needs to get is the list of categories with appearences under them, then when each category is clicked on it populates a dynamic category similar to how it does now. Since I cant imaging even the most densely packed zone having enough appearences to cause a crash.

Right now it basically grabs 'All data cached for (Thing)' and then attempts to copy it into the proper organization Simple/Nested.
Potentially could redesign to do say up to 1000 (Thing) per frame with organizing and it shouldn't break.
Memory would go way up during that session though having to copy so much data to new groups lol