That certainly is unusual behavior. Let me make sure I'm understanding you correctly. It sounds like we can subtract TestStand from this equation -- basically you've got one LabVIEW-built VI containing a subpanel which is displaying another VI.
If I'm correct, let's try this first. Are you able to run the subpanel example that ships with LabVIEW without any trouble? (You can find it by selecting Help>>Find Examples and searching for "subpanel.") If that accepts clicks as expected, what if you substitute your
subVI for the example's subVI? Does it work correctly then? If so, there must be something strange going on in the rest of your top-level code. If not, it sounds like the problem is specific to your subVI.
Let me know what happens! Have a nice evening.