You asked me to reply about the subs after I figured it out.
I was over on the doom9 forums...in the thread about an alternate sup program called SupRead (by Pelican9)
If you remember I posted last week, and one of my questions was if you or anyone else knew how to take my 1920x1080 subs and convert them to 1280x720 subs (in .sup format.)
Going through the entire thread, Pelican9 actually asked in the thread if people wanted this feature. SupRead currently has the feature to export 720 res images of the subs, but not a 720 res .sup file. Anyways, people responded yes and he said he'd get it in his next version, but since that post he was seen no more. He hasn't replied to any posts in that forum, so I'm not sure about that development.
You mentioned that it works for you, but that's because you were taking the subtitles from a bitmap format to a text format and muxing it to mkv. From there its just rendered on the fly, so there is no resolution in the subtitles cause they are text. For bluray they need to be in a bitmap format and they need to match the resolution of the video. If I tried to mux the 720p video I transcoded with the 1080p subs, the subs would not show because the area they would be rendered would be well outside of the 720p video.
I did however find a workaround. Not as easy, but it still works.
Load up the .sup file in SupRip. OCR the .sup file and save as .srt. Edit the .srt to correct any OCR issues/spelling issues. When you're satisfied with the .srt file, you can now import the .srt file into TSMuxer. So I import my video and audio file in TSMuxer, along with my .srt subtitle. You can set subtitle options in the subtitle tab in TSMuxer. I set my font to Arial. Font size 40. I set my bottom pixel offset to 36. I set TSMuxer to create a Blu-ray disk. It takes that .srt file and creates it in bluray PGS/.sup format. Loaded it up in my PS3. Works like a charm. Subtitles look great. So that is my solution to the issue until SupRead gets updated.
Quick question : eac3to requires a few different filters to encode audio. Are any of these filters required if I'm just extracting the dts/ac3 tracks or the core dts/ac3 tracks? I keep the audio in either DTS if there is a DTS track or ac3 if that's all there is for playback on bluray standalones/PS3.