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Yes there is a setting under Settings>General>Store Settings. Scroll to Main Settings and uncheck Hide Subcategories. There is also an option to Show from selected Cat only.
I had a custom menu made like that and installed by 3dcart years ago but I don't recommend it, it caused many issues especially when I switched over to a responsive template. It's better link juice I heard if customers only see main categories, then go to sub category landing page and then to the product page. Maybe more user friendly the other way but for me, to make it easier for spiders to crawl is my choice!
An interesting thing on this -- I have changed to what will be my final template and I cannot get the menus to break out to the next level -- are there some templates that simply don't allow this, or am I having a bug issue with this template (Wacky responsive).
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