I use a combination of the two. My main website has several subdirectories for things like my publications, research, teaching, etc, some of those with their own subdirectories. But then I use subdomains for websites for software projects such as hosting API documentation, such as chips-n-salsa.cicirello.org/ and jpt.cicirello.org/ . For the part of your question concerning ranking, I'm not sure. I didn't organize it that way for SEO purposes. I did it more for convenience. I suspect that it might not matter as much to SEO as some believe. I base this on Google's search console, which seems to treat everything within the domain as a single entity.
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I use a combination of the two. My main website has several subdirectories for things like my publications, research, teaching, etc, some of those with their own subdirectories. But then I use subdomains for websites for software projects such as hosting API documentation, such as chips-n-salsa.cicirello.org/ and jpt.cicirello.org/ . For the part of your question concerning ranking, I'm not sure. I didn't organize it that way for SEO purposes. I did it more for convenience. I suspect that it might not matter as much to SEO as some believe. I base this on Google's search console, which seems to treat everything within the domain as a single entity.