In practice
Use one when the section genuinely needs separate infrastructure; otherwise a subfolder keeps everything on one host.
If a subdomain already exists, link it into the main navigation so it is not treated as an island.
Why it matters
Search engines can treat a subdomain as a partly separate site, so authority does not flow as freely as within a folder.
Splitting content across subdomains is one of the most common self-inflicted SEO problems in large organisations.
Related terms