The above video is a good introduction to subtext, and the reasons why we use it.

In conversation, we rarely say exactly what we mean, especially if we are trying to spare someone's feelings or avoid a topic. Many writers forget this when writing dialogue, because they worry that their reader won't get what they're driving at unless they spell it out. Don't fall into that mentality - trust your reader to be smart enough to keep up.

And remember, you can also use the character's body language to imply more than their words do.

Subtext is very important for building good dialogue and natural-sounding characters.

But it can also be cultural. Some cultures and languages may be more direct than others. American English speakers can sometimes come across to British English speakers as offensive because they're a lot more direct in the way they express themselves. Likewise, Brits can come across as aloof or insincere because they don't always say what they truly mean.

Brits can be so opaque in their choice of language that it's become an internet joke.

The yellow column in the middle of the image below represents subtext.