Microsoft has just pushed out an update to the Xbox Video app.
The last update 2 weeks ago introduced subtitle support, and the latest update fixes a small bug related to this.
This update (version 1.6.346.0 on Windows Phone 8 and 2.6.346.0 on Windows Phone 8.1) brings:
- Fixed an issue preventing SRT files in the root of an SD card from being discovered
- Polish fixes and general improvements
Download it from Windows Phone Store here.