I have experienced the strange behavior from the ArcGIS.com map interface as well. The feature template works, but the map viewer does not translate the domain descriptions. When I attempt to add a new feature, the input dialog box shows yellow ! warnings instead of my yes/no coded value domain. I am interested in knowing when the bug is fixed myself.
If you open the web map with the ArcGIS Explorer online viewer, it will respect the default values for your subtype. That may help.