Just to let you know I have tried the above fix with sub categories

e.g.

Cat 1
|
|- Sub Cat 2
|
|-Sub Cat 3 ( 1 product)
|-Sub Cat 4


Without the fix above you would see
Cat 1 (1)
|
|- Sub Cat 2 (1)
|
|-Sub Cat 3 (1)
|-Sub Cat 4

With the fix abouve you see
Cat 1 (1)
|
|- Sub Cat 2 (1)
|
|-Sub Cat 3 (1)

So it works perfectly for sub-categories.

Kev