well your issue is the layout you have. Your using the new layout but your turning off the sidebar globally so your categories box is not being seen.
We make an assumption here in the code that if your using the new layout your using the sidebar throughout the site not just the index so you will notice if you turn the siderbar on globally your child categories are indeed shown. If you want to keep your sidebar off globally then maybe an edit would do. Maybe in showgallery.php this code add what is in bold.
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