Yes, it is counted as transactions.
But then if you do so, the effective cash back are < 8%.
So this card shall be your second card and cannot be used as first card.

Yes, but no more 8% cash back, it will be diluted. So if this is the case, better get cards like Maybank dual cards.
They are expecting you to swipe more

Assuming you are getting rm100 of cash back by spending sharp rm1000 on the 3 selected categories, that's rm1200 of total cash back and rm12000 spent.
But, AF can't be waived from 3rd year onward(I say from 3rd year as 1st year sure waived, 2nd year some can get while some are not and 3rd year cure charge and by doing anything also cannot be waived). So you need to pay rm169.6(GST inclusive), so rm1200-169.6 = rm1030.4 of total cash back.
And your spending still at rm12000, so it is 8.58%, but I just use 8%.
If you spend lesser than rm985 or spend > rm1000 or non selected categories, it will dilute your cash back more