AFAIK there is no such thing as Sub Libraries.
What you describe is
just another (full) Library. Why, I say? Because it WILL stand alone. You can move it to any computer without moving the others and it will still work. (and yes, you recovered the switch linkages properly. Something in your configuration folder probably got damaged and a fallback one was created.
Backup your configuration folder every time you add something new or make changes to a plugin configuration (the plugin is easy to replace, the settings are the hard part))
OTOH VL (Virtual Library) is a 'view' of a single Library, but behaves more like a Library by itself (searches, renames... they only affect the view)