John Mueller was asked if it is ok to interlink sub-domains, and the answer is yes, usually, because Google will treat subdomains on a website (primarily I think we can presume) as “a single website“:
“So if you have different parts of your website and they’re on different subdomains that’s that’s perfectly fine that’s totally up to you and the way people link across these different subdomains is really up to you I guess one of the tricky aspects there is that we try to figure out what belongs to a website and to treat that more as a single website and sometimes things on separate subdomains are like a single website and sometimes they’re more like separate websites for example on on blogger all of the subdomains are essentially completely separate websites they’re not related to each other on the other hand other websites might have different subdomains and they just use them for different parts of the same thing so maybe for different country versions maybe for different language versions all of that is completely normal.”
That is important if Google has a website quality rating score (or multiple scores) for websites.
Personally, as an SEO, I prefer subdirectories rather than subdomains if given the choice, unless it really makes sense to house particular content on a subdomain, rather than the main site (as in the examples John mentions).
Back in the day when Google Panda was released, many tried to run from Google’s content quality algorithms by moving to ‘penalised’ pages and content to subfolders. I thought that was a temporary solution.
Over the long term, you can, I think, expect Google to treat subdomains on most common use websites as one entity – if it is – and be ranked accordingly in terms of content quality and user satisfaction.