I took a look at the code to insert the video with subtitles. I realized that this is not actually a Moodle 3.2 feature. Rather, it is an HTML5 feature.
In the Moodle label you added, the video with subtitles is inserted using the following set of HTML5 tags:
- <video> <source src="..."> <track src="..."> </video>
The "src" attribute of the <source> tag specifies the path to the video file itself, and "src" attribute of the <track> tag specifies the path to the subtitles file. Although the HotPot module knows about the <source> tag, and can convert and"src" attribute to a Moodle-friendly URL, it did not know about the <track> tag. That's why the subtitles did not appear in HotPot activities.
I have now fixed the HotPot module so that it knows about the <track> tag and will convert the path to the subtitles file. As a result, the subtitles now appear in the HotPot activity (see attached screenshot).
To get the new functionality, please arrange for the HotPot and/or TaskChain module on your Moodle site to be updated at the next convenient opportunity. Of course you will have to remember to add the <track> tag to your <video> tags
Many thanks for alerting me to this issue