Email all Organic Group members when a subgroup is created
I managed to use make a custom rules file for OG Subgroups that achieves what I need it to. It adds the rule 'Get subgroup group members from group audience' to a 'Custom' rule group:



This makes the users of the subgroup available to rules. You can then loop through the users and send an email to each of them:



In order to do this I created  custom 'og_subgroups.rules.inc' file in the root of the OG subgroups module. This is the code I used inside it:

&lt;?php

/****************
Adds the ability to get the members of the parent group from a subgroup using rules
/****************


/**
 * Implements hook_rules_action_info().
 */
function og_subgroups_rules_action_info() {
  $items = array();

  $items['og_subgroups_get_members'] = array(
    'label' =&gt; t('Get subgroup group members from group audience'),
    'group' =&gt; t('Custom'),
    'parameter' =&gt; array(
      'group_content' =&gt; array(
        'type' =&gt; 'entity',
        'label' =&gt; t('Group content'),
        'description' =&gt; t('The group content determining the group audience.'),
      ),
    ),
    'provides' =&gt; array(
      'group_members' =&gt; array('type' =&gt; 'list&lt;user&gt;', 'label' =&gt; t('List of subgroup members')),
    ),
    'base' =&gt; 'og_subgroups_rules_get_members',
    'access callback' =&gt; 'og_subgroups_rules_integration_access',
  );

  return $items;
}


/* NEW FUNCTION ************************************************/

// This callback creates the hashed string by using the parameters provided through rules' UI
function og_subgroups_rules_get_members($group_content) {

// get the nid from the passed value of the content being added
$nid = $group_content-&gt;nid-&gt;value();

// trying to manually call the get inherited users function from og_subgroups.common.inc
$inherited_users = _og_subgroups_get_inherited_users("node", $nid);

$members = array();

foreach ($inherited_users as $inherited_uid =&gt; $data) {
  // Get the group members the group content belongs to.

  $user=user_load($inherited_uid);

  // push the returned user to the array of members
  array_push($members, $user);

}



// return the users  
  return array('group_members' =&gt; $members);

}

/**
 * OG Rules integration access callback.
 */
function og_subgroups_rules_integration_access($type, $name) {
  // Grant everyone access to conditions.
  return $type == 'condition' || user_access('administer group');
}


For those of you who prefer patches here is the patch I created: Patch on drupal.org