Hi Ben Barnard, I assume that you are referring to where you specify the location where the content should be published, like in the image below. Is that right?
When you create new content it will default to the location you were looking at when you created the content, but you can change that. By selecting that last option you are telling Jive to NOT publish this in the current Space, but instead publish it in the root space of your Jive instance. In many Jive deployments this is forbidden due to permissioning on the root space... at least it is in mine.
If the document is not in a space and a category within that space, how does someone find it?
Again, by "that" space we would are referring to the root space of the Jive instance. In that case it will be visible in the root Contents page /contents, in search results, in any Recent Activity widgets/tiles that you have on your home page of your Jive community.
Hope that helps.