'Subspace' is just a mental state. Think of it for us as entering a state of flow when we're working on something and get in the zone.
In this AU, it's a space in their mind that submissive people reach upon fully expressing their nature. A euphoric state when their needs are met with a dom. They feel so safe or happy that they blank out, leaving themselves vulnerable. Another way to understand is that they have mentally hit climax and have become high naturally ╮( ̄▽ ̄)╭

maybe it's just me, but I still don't understand what's this "sub space" they're talking about TT
what does that even mean??