Hi Damien,
So if I'm reading this correctly, the consultant is saying that due to the size of the site (tens of thousands of pages), and the need to categorise its content, that subdomains are the best choice.
I would say that there are far bigger websites using categories within subfolders, notably big retailers, e.g.
http://www.marksandspencer.com/c/beauty, http://www.marksandspencer.com/c/food-and-wine, http://www.marksandspencer.com/c/mands-bank
http://www.waitrose.com/home/inspiration.html, http://www.waitrose.com/home/wine.html, http://www.waitrose.com/content/waitrose/en/home/tv/highlights.html (<-- the last one being a crappy version, but a subdomain nonetheless)
and so do websites that deal with providing content for very different audiences:
http://www.ncaa.com/schools/tampa, http://www.ncaa.com/championships/lacrosse-men/d1/tickets, http://www.ncaa.com/news/swimming-men/article/2014-03-29/golden-bears-and-coach-david-durden-earn-third-national-title, http://www.ncaa.com/stats/football/fbs
Has the consultant provided examples of other websites doing this that would take on the same structure?
There are hundreds of examples of websites whose structure / categories are properly understood despite existing in subdirectories, so I'm still sceptical that this is a necessity.
This is not to say that a subdomain approach wouldn't work and is definitively bad or anything, I'm just not really convinced that the reasoning is strong enough to move content away from the root domain.
I disagree about user experience - from a user's perspective, the only difference between subfolders and subdomains is the URL they can see in the address bar. The rest is aesthetic. You can do or not do everything you'd do with the design of a website using subdirectories that you'd do with a website(s) employing subdomains. For example, just because content sits on www.icy-veins.com/wow/, its navigation wouldn't have to link to www.icy-veins.com/hearthstone/ or mention the other brand in any way if you don't want to. You can still have separate conversion funnels, newsletter sign-ups, advertising pages, etc.