It is indeed supposed to be the case that if you embed a model card inside a subckt model, that the model is local to the subcircuit instance and should respect the model parameters.
In fact, I tested it out by copying a subcircuit netlist from Xyce_Regression/Netlists/SUBCKT/subckt_a1.cir and modifying it to do just that, and it clearly does use the parameter passed in as the VTO.
```
TEST A1 of subcircuit regression tests
.subckt INV1 IN OUT VDD GND VTO=1.6
.MODEL cd4012_nmos NMOS (
+ LEVEL = 3 UO = 190 VTO = 'VTO' TOX = 6E-08 NSUB = 8.601E+15
+ NSS = 0 RS = 13.21 RD = 11.59 RSH = 0 IS = 1E-14
+ VMAX = 4.206E+04 NFS=1E10 GAMMA=0.37 PHI=0.65
+ XJ = 7.1E-06 LD = 8.6E-07 DELTA = 0 THETA = 0.0021 ETA = 0.057 KAPPA = 0.15
+ KP = 2.161E-05 L=5u W=175u
+ CBD=0.1P CBS=0.1P PB=0.81 CGSO=2P CGBO=4P CGDO=2P CJ=2E-4 MJ=0.5 CJSW=1E-9
+ MJSW=0.5 JS=1E-8 TPG=0 KF=1E-25 AF=1 FC=0.5 TNOM=27)
.MODEL cd4012_pmos PMOS (
+ LEVEL = 3 UO = 310 VTO = '-VTO' TOX = 6E-08 NSUB = 5.701E+15
+ NSS = 0 VMAX = 5.374E+04 RS = 5.359 RD = 93.66 RSH = 0 IS = 1E-14
+ XJ = 7.9E-06 LD = 3E-08 DELTA = 0 THETA = 0.0278 ETA = 0.535 KAPPA = 0.643
+ KP = 1.711E-05 L=5u W=270u GAMMA=0.37 PHI=0.65 NFS=1E10
+ CBD=0.1P CBS=0.1P PB=0.81 CGSO=2P CGBO=4P CGDO=2P CJ=2E-4 MJ=0.5 CJSW=1E-9
+ MJSW=0.5 JS=1E-8 TPG=0 KF=1E-25 AF=1 FC=0.5 TNOM=27)
MN1 OUT IN GND GND CD4012_NMOS L=5u W=175u
MP1 OUT IN VDD VDD CD4012_PMOS L=5u W=270u
.ends
Xinv1 IN MID VDD 0 INV1 VTO=1.6
Xinv2 MID OUT VDD 0 INV1 VTO=1.0
VDDdev VDD 0 5V
RIN IN 1 1K
VIN1 1 0 5V PULSE (5V 0V 1.5us 5ns 5ns 1.5us 3.01us)
R1 OUT 0 10K
C2 OUT 0 0.1p
.op
.tran 20ns 30us
.print tran PRECISION=10 WIDTH=19 v(out) v(in) v(1)
.end
```
If one runs this, one gets the .op output that shows 1.6/-1.6 being used for VTO in the XINV1 mosfets and 1.0/-1.0 in the XINV2 mosfets:
```
Number of MOSFET level 3 models: 4
name XINV1:CD4012_NMOSXINV1:CD4012_PMOSXINV2:CD4012_NMOSXINV2:CD4012_PMOS
type NMOS PMOS NMOS PMOS
level 3 3 3 3
...
VTO 1.6 -1.6 1 -1
...
```