If the camera is pointed at something, it tags an enemy, but what does it actually do if you tell it to "take picture"? Does it take a picture and store it somewhere, or does it just make the noise?
It just makes noise. The camera has no real use other than to enemies most of the time, but a few quests do require you to take photos of stuff. I know there was one that required me to kill a buncha pirates and then take a picture of their corpses, for example.
The pictures are not stored anywhere. However, there are one or two missions where you have to take missions of certain enemies then give them to someone. Also, the camera is very useful for tagging enemies and for hunting.