I have only tested and seen this on DB versions 3845 and earlier. But as I read the upgrade_230() function code, I don't see how this would work in other cases either.
Here's what I saw. I have a MU instance that running very old code, PRE-taxonomy code. It has never had the taxonomy upgraded.
I did the standard /wp-admin/upgrade.php and stepped through the upgrade process. What I get is a bunch of categories that are all named "" and their slugs are "-2", "-2-2", "-2-2-2"... Of course, most themes will render this as "Filed Under:" where there is no text after that, because the category name is blank.
Debugging this, I found that the upgrade_230() function will load the categories from $wpdb->categories on line 551... everything looks great. But then on line 557 it attempts to use the local variable $slug, that has not been set and is null. Also on line 575 it attempts to INSERT the category name as a term, but $name and $slug are not correctly set up.. the result is that these are inserted as NULL and NULL (or "-2", "-2-2",...)
I believe the fix for this is to add the following code around line 555
$name = $wpdb->escape($category->cat_name);
$slug = $wpdb->escape($category->category_nicename);
