here are my results:
bsi file, vobsub subtitles with DefaultSub=0 and LAN
Code:
[Subtitles]
Directory=.
sub1=|lotr-fellowship-p1.idx
defaultsub=0
I have no problem at all making subtitles appear/disappear using a shortcut.
On the other hand, I had trouble cycling through subs languages using a keyboard shortcut.
Sometimes, when the starting sub is english, I can switch to french once but that's all. If starting sub is french, there's nothing I can do.
(in the idx file, french is the first of the 2 languages)
You should be careful when you set the shortcuts. Maybe [ctrl+S] is already associated with another action.
In my case, it was associated to "audio stream volume cycle" (I think it's default setting, I can't remember changing this one).
Thus when I associated it to cycle subtitles, trying to use it had no effect. I had to manually delete the association I didn't need.
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edit
ok don't read the last paragraph, I forgot you wrote it worked when using AVI - no BSI