To programmatically replace a Model block with a Subsystem block, use the example MATLAB code below.
In this example, the "parent" model references a "child" model using a Model block named "Model." The example MATLAB code adds a Subsystem block "mySub" to the "parent" model and populates "mySub" with the contents of the "child" model.
open_system('parent');
add_block('built-in/Subsystem',['parent/mySub']);
load_system('child');
Simulink.BlockDiagram.copyContentsToSubsystem('child',['parent/mySub']);
pos = get_param('parent/Model','position');
delete_block('parent/Model');
set_param('parent/mySub','position',pos);
