We play where subs do not attack one another or have any effect on one another on the map or on the battleboard.
What if you have a naval battle involving two large fleets with subs on both sides?
You just say “subs can’t hit planes OR SUBS” and play it out. If there ends up being only subs left, the battle ends - put the subs back out on the map.
1945 February 6- The Royal Navy submarine Venturer became the only submarine to sink another submarine while they were both submerged when she sank U-864 off Norway. In all the naval action of the whole world war this only happened once! I think you could say realistically it shouldn’t happen on the scale od Axis and Allies.
As far as limiting the subs, IMO they should be limited. Their primary role historically was convoy raiding, and they now only cost 6 IPCs.