Nothing there that helps I'm afraid but I am grateful for your continued help.
Plug-ins that hide child category posts have always been extremely popular and high download. This is because on websites where there are three or four levels of sub-category, it can soon result in many tens of posts showing unnecessarily at higher (hierarchical) levels. Without a plug-in, or better still, core fix, large websites ARE completely unusable.
I have seven or so different wordpress sites and I can't think of one example where this is sensible core behaviour and not having an option to hide them at least is very poor.
The two websites given as examples receive in the order of 10000 pageviews/month, suffice to say that since I upgraded, I have received twenty-odd emails 'informing' me that the site navigation has stopped working.
I can't fix it and it is enough reason to wind back to an old version where plug-ins work again.