The reason why the domain parameters propagation error is thrown is because when 'ssc2subsystem' is applied to the Simulink subsystem, the resulting block (myComponent.ssc) is now treated a single Simscape block, which would propagate domain parameters between all 4 of its ports. The Two-Phase Fluid Properties block's function is to specify the domain parameters to be propagated throughout the connected network of the same domain. Since you now have one on the left side and another one on the right side, it throws an error to let you know that you cannot specify the domain parameters twice.
To resolve this issue, in the file myComponent.ssc, add the attribute "Propagation = blocks" to the component declaration. That is, replace the first line with this:
component(Propagation = blocks) myComponent
This will let Simscape know that the block myComponent should not propagate domain parameters between all 4 of its ports. Instead, it will look into the internal connections based on the connect statements to decide how the domain parameters should be propagated.
