Question: When using one - hot encoding, what potential issue should you be cautious of , especially when dealing with a categorical variable with many unique

When using one-hot encoding, what potential issue should you be cautious of, especially when dealing with a categorical variable with many unique categories?
Reduction in the number of features in the dataset
Underfitting due to loss of information
The introduction of ordinal relationships between categories
Overfitting due to the introduction of multicollinearity
When using one-hot encoding, what potential issue should you be cautious

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