The Multi-Tenant w/ Subdomains mode works similarly to the Multi-Tenant strategy, but each workspace is accessed via its subdomain.
The term workspace is just a label, you can rename it to anything you find appropriate to your business model. Examples are Organizations, Companies, Teams, etc.
If users came to the subdomain by invitation, they will have the roles the admin previously assigned to them. In that case, they will go straight to the application.
Managing Workspaces
Users can switch, create, edit or delete workspaces on the Workspaces page that can be accessed via the User's menu. Permission to edit and delete a specific workspace depends on the role the user has on that workspace.