It's a DVD project and I knew that for BD the gaps are required, but didn't know that Encore might also not like it when your DVD subs don't have gaps.
Bottom line: I fixed all gaps and re-built and no errors!
NOTES: It only highlighted the subtitle gaps as an error after I temporarily removed the Video file. So remove your video file and click anywhere in your subtitle track… now suddenly you get the exclamation mark and the red overlap marks. Right click subtitle tracks and fix gaps. Add video file back in (it automatically goes to 00:00:00:00) and rebuild. Worked for me.
