I have a first (alpha) release of a new plugin that will provide collapsable functionality for the category list usually found in the sidebar.
Similar (a companion) to the Fold Page List plugin developed previously, this plugin will collapse a list of nested categories to just the top level parents. If a selected category has children then the top level of those children will be listed under their selected parent, but all other top levels parents will be collapsed to just their top levels.
Thus a category hierarchy that contains this:
Would naturally collapse to just
If nothing were selected.
Selecting Land would list:
And so on, expanding only those parts that are relevant to the path to the currently selected (sub-)category.
This is an 'alpha' release because it so far lacks attention to differential styling for selected categories, and also for carrying that 'selection' up to the topmost parent. I hope to add this before releasing the 1.0 version.
Information regarding functionality, installation and use is available from the Fold Category List Plugin page.