Chrome/Chrome OS Version: Whatever was running on the AOpen Chromebox Mini on December 28th, 2017.
Chrome OS Platform: AOpen Chromebox Mini
Network info: not sure, probably doesn't matter.

Please specify Cr-* of the system to which this bug/feature applies (add the label below). ← I don't see a button to do that anywhere.

Steps To Reproduce:
(1) Open a .avi video with soft subtitles from the file explorer. (Or a .mkv video. Or a video where the subtitles are in a separate .srt file.)

Expected Result:
Subtitles are automatically selected and viewed, or there's a button to select them.

Actual Result:
I apparently can't read videos with subtitles on the default video app.

How frequently does this problem reproduce? (Always, sometimes, hard to reproduce?)

Always.

What is the impact to the user, and is there a workaround? If so, what is it?

I have to install an Chrome extension to read videos with subtitles. Worse, no extension seems to work well with subtitles in .mkv files.