Ah! Weird! The above code is working in my site, but not in yours’! I even tried adding a php widget with this code, (which is supposed to work, of course! 🙂
<?php if ( function_exists('wp_tag_cloud') ) : ?>
<li>
<ul>
<?php wp_tag_cloud('format=list&smallest=12&largest=12'); ?>
</ul>
</li>
<?php endif; ?>
But the widget itself is invisible on the site! So I suspect the issue is with the WordPress version. Let me know once you update the WordPress. I’ll check it again.
BTW, a blank functions.php file is okay in the child theme. No need to delete it from the server.