How to make Drupal 7 render taxonomy tags as RSS categories? In Drupal 7, taxonomy tags do not show up in the RSS feed. How do I make them visible in the feed, so that RSS reader users can filter out stories based on these tags?

(I found it difficult to find an answer to this, so posting my findings in the hope this helps others)
This used to be the default behaviour in D6, but was accidentally removed from D7 after some refactoring. The latest versions of D7 contain a patch that allowed a third-party module to show RSS categories.

Step 1: download and install the RSS field formatters module.

Step 2: navigate to /admin/structure/types

Step 3: click "manage display" next to the desired content type

Step 4: expand "custom display settings" and make sure "RSS" is checked:



Step 5: select the "RSS" tab (after hitting Save if you had to enable the RSS checkbox). This one is a bit hard to notice:



Step 6: add the Tags to the fields list if not already there. Set the format to "RSS category":



Now save and enjoy your taxonomy tags in your RSS feed!