You need to extract the blu-ray PGS subs, convert them to VOB (DVD format), remerge that back into the MKV and then transcode with Handbrake making sure to select the VOB sub and have HB burn in the sub to the m4v for ATV.
I am in the process of writing up instructions for this, but it will likely be a week or so before I have time to finish it.
Basically, you need mkvtoolnix & BDsup2sub to handle this. High level workflow is:
- use MKVmerge GUI (part of mkvtoolnix for Mac) to identify the sub you want. You need the ID number
- use mkvextract (a command line tool also part of mkvtoolnix) to extract that sub
- Use BDsup2sub (a Java program with GUI) to convert to .SUB format
- Use MKVmerge GUI to remux the new VOB sub with the original MKV
The hardest part of this whole thing is actually identifying the forced sub. Most of the rippers don't do a great job of tagging the subs correctly in the MKV, so you need to play the movie and experiment turning sub tracks on and off using something like VLC to get the correct one. MakeMKV does a fairly good job of identifying forced subs, but it sometimes creates an MKV with sub tracts that are empty.
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They aren't in my experience, although there are a few here that will claim they do that with no problem.