Hi,
I'm in Finland and can confirm the subtitle problem. It has come up with this latest update, no problems before. VLC finds the sub tracks normally and lets me choose which one I want to use, but displays none of these. I have tried with a few movies, including ones I have succesfully watched on VLD iOS before, with subs.
Most of my movies are .mp4, processed with HandBrake, and there have been absolutely no subtitle issues before this. I've been a happy VLC iOS user and I'm sure you'll fix this in no time
Cheers!