Restricted Categories

The only way i found to do this was to set up 2 seperate databases, and link to them. You can password the directory of the second database and upload your css to make them look the same.
Example
https://www.yoursite.com/blog (public)
https://www.yoursite.com/blog2 (private/passworded)
So you’d need 2 instalations.
Thats what i did on my site https://www.cynikalsam.com/blog
There’s probably a more effecient way to accomplish this, but i hant found it..

How?

I’ve seen this question come up numerous times – including once from myself – and although podz/cynikalsam are valid by saying two separate blogs, I don’t find it a satisfactory answer.
I would like to be able to control all content from one place, not have to set up multiple copies of WP for each instance of use. As easy as it is to setup – I have it down to less than 5 minutes per install – it is the post-install processes, such as plugins, templates, mods, etc. that add to the maintenance time. As well as upgrade control.
But above all of that, I would like to be able to control content and its filtering from one place. And I would like to extend some of those features out to some content contributors, but not all.
I realize that WP is a Personal Publishing System, so I can see the argument for not adding features like multiple blogs and securing categories, but I strongly feel that these are natural features that WP should have on the roadmap as it matures.

I was looking for exactly the same thing. Found the ViewLevel plugin which does a nice job of hiding posts to users below a set level.
Check it out at https://www.furbona.org/viewlevel.html
The only thing that I wish they had thought about was to allow a category implementation. I just tested the usage instructions and the posts are indeed hidden, but if I group them by category, i.e. – Confidential, the world can still see the category albeit an empty one.