WordPress menu from categories, subcategories and posts

Recently we needed to create a custom menu of posts in a hierarchy using the following format:

- category
-- posts
-- subcategory
--- posts
- category
-- subcategory
--- posts

Note that if a category doesn't have subcategories, the posts are listed in the same level as subcategories.

I discussed the issue with @nielslange and he approached it in the following fashion:


I've then modified his code for use in a WordPress menu structure:


This results in the following:



I'll add the CSS soon!

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