Added taxonomy filter

index.php

<?php
/**
 * Plugin Name: Media Library Categories
 * Plugin URI: http://wordpress.org/plugins/wp-media-library-categories/
 * Description: Adds the ability to use categories in the media library.
 * Version: 1.3
 * Author: Jeffrey-WP
 */

/** register taxonomy for attachments */
function wpmediacategory_init() {
	//Default taxonomy
	$taxonomy = 'category'; 
	//Add filter to change the default taxonomy
	$taxonomy = apply_filters( 'wpmediacategory_taxonomy', $taxonomy );
	register_taxonomy_for_object_type( $taxonomy, 'attachment' );
}
add_action( 'init', 'wpmediacategory_init', 100 );

/** Add a category filter */
function wpmediacategory_add_category_filter() {
	$screen = get_current_screen();
	if ( 'upload' == $screen->id ) {
		//Default taxonomy
		$taxonomy = 'category'; 
		//Add filter to change the default taxonomy
		$taxonomy = apply_filters( 'wpmediacategory_taxonomy', $taxonomy );
		$dropdown_options = array( 'taxonomy' => $taxonomy, 'show_option_all' => __( 'View all categories' ), 'hide_empty' => false, 'hierarchical' => true, 'orderby' => 'name', );
		wp_dropdown_categories( $dropdown_options );
	}
}
add_action( 'restrict_manage_posts', 'wpmediacategory_add_category_filter' );


/** Add custom Bulk Action to the select menus */
function wpmediacategory_custom_bulk_admin_footer() {
	//Default taxonomy
	$taxonomy = 'category'; 
	//Add filter to change the default taxonomy
	$taxonomy = apply_filters( 'wpmediacategory_taxonomy', $taxonomy );
	$terms = get_terms( $taxonomy, 'hide_empty=0' );
	if ( $terms && ! is_wp_error( $terms ) ) :
		?>
		<script type="text/javascript">
		jQuery(document).ready(function() {
		<?php
		foreach ( $terms as $term ) {
			echo 'jQuery(\'<option>\').val(\'cat_' . $term->term_taxonomy_id . '\').text(\''. __( 'Category' ) . ': ' . $term->name . '\').appendTo("select[name=\'action\']");';
			echo 'jQuery(\'<option>\').val(\'cat_' . $term->term_taxonomy_id . '\').text(\''. __( 'Category' ) . ': ' . $term->name . '\').appendTo("select[name=\'action2\']");';
		}
		?>
			jQuery('<option>').val('cat_0').text('<?php _e( 'Category' ); ?> <?php echo strtolower(__( 'Remove' )); ?>').appendTo("select[name='action']");
			jQuery('<option>').val('cat_0').text('<?php _e( 'Category' ); ?> <?php echo strtolower(__( 'Remove' )); ?>').appendTo("select[name='action2']");
		});
		</script>
		<?php
	endif;
}
add_action( 'admin_footer-upload.php', 'wpmediacategory_custom_bulk_admin_footer' );

/** Handle the custom Bulk Action */
function wpmediacategory_custom_bulk_action() {
	global $wpdb;

	if ( ! isset( $_REQUEST['action'] ) )
		return;

	// is it a category?
	$sAction = ($_REQUEST['action'] != -1) ? $_REQUEST['action'] : $_REQUEST['action2'];
	if ( substr( $sAction, 0, 4 ) != 'cat_' )
		return;

	// security check
	check_admin_referer('bulk-media');

	// make sure ids are submitted.  depending on the resource type, this may be 'media' or 'post'
	if(isset($_REQUEST['media'])) {
		$post_ids = array_map('intval', $_REQUEST['media']);
	}

	if(empty($post_ids)) return;

	$sendback = admin_url( "upload.php?editCategory=1" );

	//$pagenum = $wp_list_table->get_pagenum();
	//$sendback = add_query_arg( 'paged', $pagenum, $sendback );

	$newCategory = str_replace('cat_', '', $sAction);

	foreach( $post_ids as $post_id ) {
		if ($newCategory == 0) {
			// remove category
			$wpdb->delete( $wpdb->term_relationships, array( 'object_id' => $post_id ) );
		} else {
			// update or insert category
			$wpdb->replace( $wpdb->term_relationships,
				array(
					'object_id' => $post_id,
					'term_taxonomy_id' => $newCategory
				),
				array(
					'%d',
					'%d'
				)
			);
		}
	}

	wp_redirect( $sendback );
	exit();
}
add_action( 'load-upload.php', 'wpmediacategory_custom_bulk_action' );

/** Display an admin notice on the page after changing category */
function wpmediacategory_custom_bulk_admin_notices() {
	global $post_type, $pagenow;

	if($pagenow == 'upload.php' && $post_type == 'attachment' && isset($_GET['editCategory'])) {
		echo '<div class="updated"><p>' . __('Settings saved.') . '</p></div>';
	}
}
add_action( 'admin_notices', 'wpmediacategory_custom_bulk_admin_notices' );


/** Add a link to media categories on the plugin page */
function wpmediacategory_add_plugin_action_links( $links ) {
	//Default taxonomy
	$taxonomy = 'category'; 
	//Add filter to change the default taxonomy
	$taxonomy = apply_filters( 'wpmediacategory_taxonomy', $taxonomy );
	return array_merge(
		array(
			'settings' => '<a href="' . get_bloginfo( 'wpurl' ) . '/wp-admin/edit-tags.php?taxonomy=' . $taxonomy . '&amp;post_type=attachment">' . __('Categories') . '</a>'
		),
		$links
	);
}
add_filter( 'plugin_action_links_' . plugin_basename( __FILE__ ), 'wpmediacategory_add_plugin_action_links' );
?>

Where is the "wpmediacategory_taxonomy" filter defined? It seems like it does nothing...