I know this is an old post but I've just had the same issue and worked around it in a different manner as I didn't have permission to install Report Builder.
I worked around it by copying the RDL to a new location (as to not break the one in the project) opened the RDL in a text editor, looked for the name of the sub report and prefixed it with the subfolder.
So it was:
and it's now:
I then used the SSRS Report Manager to upload the modified RDL over the top of the existing report.