Last modified: 2011-04-14 15:10:41 UTC
Say page Category:X belongs to a category named Y, and the page Category:Y has "__HIDDENCAT__" in it. Then Category:X is rendered with "Hidden category: Y" at the bottom.
It seems that hidden categories are always displayed in the category namespace. CC'ing Tim since he did that (r31262).
*** Bug 21515 has been marked as a duplicate of this bug. ***
A possible solution to this would be to have an option that can be configured to allow hidden categories to be hidden on hidden categories pages.