So, I’ve dusted off my old WDTV Live and gave it to my parents to watch some MKVs (with internal SRT subs) from their NAS. Settings > Video > subtitle standard is set to OFF but the subs are still shown. I turn the setting off again and the subs will not be displayed but only till the WDVT is power-cycled. The mkvs are flagged to default/forced no, not that the WDTVs ever cared about flags.
So, is this a known bug of the 1.06.34 firmware? I’ve been out of the loop for a while.