The problem is this is a bit clunky because if people click on that it appears to be exactly what is is, a category they can't add media to.
Currently it does open the subcategory menu and on the right it's either a blank page with the message:
No media has been added yet. And no option to add media - (a bit better would be a message saying, please click on a subcategory)
Or if the subcatories have media it shows all of those thumbnails, but with clue about which subcategory they are in.
I would like if the subcategories had a thumbnail, so when the parent category opens, it shows you thumbnails of its subcategories.
I think there are other good options to making this better, including some other suggestions that have been made, e.g. sub albums:
Or this, which is associated (users creat albums within a category)