[Steven Zahm]

@ scott

Sorry, no as dropdowns do not support permalinks which is why it uses the query string instead. Using permalinks offer improved SEO (in theory, according to SEO experts). This is why both the Category widget and Enhanced categories utilize them instead. In your case I would recommend navigating to the Connections Settings admin page and click the Display tab. Scroll to the Category section and enable the option to display the categories above the directory and then adjust the display options to suit.

Hope this helps!