I’m 90% sure sub surf is just not supported by ray trace.
first, try not using the two sided foliage setting. Go with default lit. See if you can get sub surf to work at all when ray tracing is on.
Second, should that be working (which i don’t think it would), you need to review the two sided foliage .usf to determine why its applying the sub surface differently from the default lit shader.
Btw, you also need an opacity value to determine how the shading of the sub surf is done. Perhaps connecting the same mask texture will make it work… before you go testing the shading models… you can also set it to a default scalar value like .5.
It should not affect the transparency if using two sided foliage.