There's no way of knowing if they diagnosed the O2 sensor or just took a guess at it, but for certain they had no business quoting that ridiculous amount of $$ for a cat, when there's no reason to believe there's even a problem with it at all. You can ask the mechanic who did the brakes what he thinks about diagnosing the O2 sensor, and see what he has to say about that.
I find it bizarre that Kia used the term 'carbclean fluid', because that's not something they would normally ever mention to an owner. What is recommended by just about everyone in the automotive business is fuel system cleaner, so you can add a bottle of Techron Complete Fuel System Cleaner to your next gas fill-up. The fuel system cleaner is good routine maintenance, and is something you can do every 3-5K miles. However, the fuel system cleaner is unlikely to eliminate the code.
One thing that you didn't mention is how it's running, and specifically if performance has become worse recently.