Can I calculate ROW_NUMBER() for only consecutive records?
I was able to address this using LAG():

SELECT
    Sequence, Subset,
    CASE WHEN Sequence = 1 OR Subset &lt;&gt; LAG(Subset, 1) OVER (ORDER BY Sequence)
        THEN 'New subset'
        ELSE 'Continuation'
        END
FROM
    @Data


This returns "New subset" for records #1, #4, and #6.  Apparently LAG() partitions slightly differently from ROW_NUMBER().

Obviously this doesn't provide row numbers, but it helped me reach the goal of identifying consecutive sequences of numbers, when the subset identifier can repeat.