I found the problem. Ignacio is correct, the syntax should 
be <live-editor-innards updates="#category,#product"/>. When a product 
category is changed thru live-editor, the update request is sent to 
"ProductsController#update as JS". But inside ProductsController update, 
there is no information about @assigned_product. If @assigned_product is 
set within the hobo_update block (see below), it will work. 

<index-page>
<div part="product">
   <table-plus update="product" with="&@assigned_product" 
fields="this,body,category"> 
      <category-view:> 
         <div part="category"> 
            <live-editor-innards updates="#category,#product"/> 
         </div> 
       </category-view> 
    </table-plus> 
</div>
<index-page>

def update
    hobo_update do
      @assigned_product = Product.all
    end
end

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