SharePoint Hierarchical Scale

The hierarchical scale is similar to an ordinal (categorical) scale, but individual categories can be grouped into larger groups. There is no limitation to the depth of these groupings, but it is generally advisable to use two to three levels to avoid overcrowding the chart. This type of scale is commonly used in sales and financial charts that group data based on time or region, such as quarterly data or regional sales data.

Match Data Granularity
Select category grouping that matches the data for instance, use monthly/quarterly grouping for data that spans several quarters.

Avoid Overcrowding and long labels
Avoid using long category labels for leaf nodes in the grouping as they will not be readable when many categories are present in the hierarchy tree.