With the Plex LG SmartTV app, if the media is direct streaming, such as when audio is transcoding, and you enable any subtitle, Plex will transcode the video.
If you have video transcoding disabled, or the server is not powerful enough to transcode the video, playback will fail.
You can monitor playback via Plex Dashboard → Now Playing to determine if the media is direct playing, direct streaming, or stranscoding.
The root cause lies with the streaming protocol used between the Plex app and the server.
You may want to consider using a different Plex client, such as Android TV, which will direct play subtitles even if the video or audio is transcoding (Ex: Nvidia Shield Pro, Amazon FireStick 4K Max, etc.)