With Default installation of 5.x-1.36 version of theme, there is support for subcatgories. But it won't show subcategories out of the box because some code changes made to page.tpl.php as part of #207084: How to display subcategories below the category in the header? did not make to actual release (not sure if that was on purpose) Specifically missingchanges mentioned in this comment http://drupal.org/node/207084#comment-957973 to page.tpl.php
Even after adding those changed it is better but the layout gets garbleds. So something else may be required.
Comments
Comment #1
mercmobily commentedHi,
Philbar, can you have a look at this one?
Merc.
Comment #2
philbar commentedDuplicate of #207084: How to display subcategories below the category in the header?