Problem with hidden empty cats

Thank you for the positive feedback.

I have just tried this and it is working as expected.

If you are using the drop-down option then if you have a sub of a sub-category that has a post but the sub-category itself has no posts then neither is shown. This is the expected behaviour for the dropdown list; it is generated by a built-in WordPress function that stops at it reaches the first empty level – if you uncheck the “Display as dropdown” option then it will show all the levels of category down to the lowest one with posts and show them in a list, summing up the post counts.

Perhaps this is a bug with WordPress but either way the functionality of the list and down-drop functions isn’t exactly the same and as they are core functions I can’t change them.