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As far as I'm aware, all subtitles are "soft subtitles" in that they are encoded into the video clip and the user/viewer always has to choice os whether to display them or not. The other option is titles, which are always displayed and cannot be disabled.
Not really, the user has the ability to:
1) Create subtitles imprinted on a video file
2) Create subtitles for discs/files
The first option when used with MKV files will encode the subtitles into the file and a player such as VLC or the like will not have control to turn subtitle layer on or off, it's always on. The second option writes the subtitles to the MKV file but the ability to display is controlled by the player. With VLC and/or other players that support subtitles one would need to turn on subtitles during playback.
Options 1 and 2 are controlled in the Subtitle Room (F12) with the icons in the lower right corner.
Jeff