The problem does not persist that I see when I test it on my install.
If you have a usergroup set to not upload in a category it does not appear in the cat dropdown unless your an admin. Is that how your testing this cause you can't do it like that since an admin sees everthing
This code is very specific here in pp-inc.php. The code in bold says that the cat only appears if they have upload priviledges
Code:
Content visible to verified customers only.