Both were nominated as supporting actor. Supporting category dates from 1936 The supporting category was originally created in 1936 to honor the achievements of actors whose names appeared in secondary roles. That all began to change in the '70s. Unlike SAG, the academy has no designated award for ensemble work. Travolta was in all three of the movie's stories.
Various factors influence a studio's decision to campaign for a leading or supporting performance.
Initially, according to Barker, Harden appeared to be a best-actress candidate, but when critics began citing her for her supporting work, the campaign was shifted accordingly. So there was never any consideration of mounting a best-actor promotional campaign. Sometimes actors make the determination as to how they'd like to be considered, again based on their perceptions of the competition. And he was right. But Macy wanted to be positioned in support, which proved to be a good move, earning him a nomination that he might not otherwise have received as lead actor.