Hi Tracy,
I once found it instructive for this question to examine daily HRU outputs of SWE and potential ET during times of zero precipitation, finding daily decreases in SWE that tracked potential ET. So I think SWAT does apply a sublimation correction, using potential ET. It may be the soil evaporation form that is used (?), i.e. the Penman-Monteith with canopy resistance (r_s) set to zero. Also note that like snowmelt, evaporation from snowpack is areally weighted by snow covered area using the the depletion curve.
Steve