ValueError: Shapes (None, 1) and (None, 3) are incompatible

I have a 3 dimensional dataset of audio files where X.shape is (329,20,85). I want to have a simpl bare-bones model running, so please don’t nitpick and address only the issue at hand. Here is the code:

model = tf.keras.models.Sequential()
model.add(tf.keras.layers.LSTM(32, return_sequences=True, stateful=False, input_shape = (20,85,1)))
model.add(tf.keras.layers.LSTM(20))
model.add(tf.keras.layers.Dense(nb_classes, activation='softmax'))
model.compile(loss='categorical_crossentropy', optimizer='adam', metrics=["accuracy"])
model.summary()
print("Train...")
model.fit(X_train, y_train, batch_size=batch_size, nb_epoch=50, validation_data=(X_test, y_test))

But then I had the error mentioned in the title:
ValueError: Shapes (None, 1) and (None, 3) are incompatible

Here is the model.summary()

Model: "sequential_13"
_________________________________________________________________
Layer (type)                 Output Shape              Param #   
=================================================================
lstm_21 (LSTM)               (None, 20, 32)            15104     
_________________________________________________________________
lstm_22 (LSTM)               (None, 20)                4240      
_________________________________________________________________
dense_8 (Dense)              (None, 3)                 63        
=================================================================
Total params: 19,407
Trainable params: 19,407
Non-trainable params: 0
_________________________________________________________________
Train...

For this, I followed this post and updated Tensorflow to the latest version, but the issue persists. This post is completely unrelated and highly unreliable.This post although a bit relatable is unanswered for a while now.

Update 1.0:

I strongly think the problem has something to do with the final Dense layer where I pass nb_classes as 3, since I am classifying for 3 categories in y.

So I changed the Dense layer’s nb_classes to 1, which ran the model and gives me this output, which I am positive is wrong.

Train...
9/9 [==============================] - 2s 177ms/step - loss: 0.0000e+00 - accuracy: 0.1520 - val_loss: 0.0000e+00 - val_accuracy: 0.3418

<tensorflow.python.keras.callbacks.History at 0x7f50f1dcebe0>

Update 2.0:

I one hot encoded the ys and resolved the shape issue. But now the above output with <tensorflow.python.keras.callbacks.History at 0x7f50f1dcebe0> persists. Any help with this? Or should I post a new question for this? Thanks for all the help.

How should I proceed, or what should I be changing?