Right, the categories are treated as two separate categories (one is a parent, the other is a child). You can move all of the posts from the child category to the parent one by following these steps:
1) Go to Posts -> Edit and choose the child category from the “View all Categories” drop-down menu.
2) Use the Bulk Edit feature to modify a group of posts in one step – http://en.support.wordpress.com/posts/edit-posts-screen/#bulk-edit
If you run into any issues with the process, shoot us an e-mail at http://support.wordpress.com/contact