Subtitles embedding doesn't work

OS: Windows Vista Business SP2 32bit HW: Lenovo R61, Intel Core 2 Duo 2GHz, 4 MB RAM VLC: 2.2.2

Steps to reproduce:

1. Set black background for subtitles in Preferences (see snapshot).
2. Press Ctrl+R to open Convert/Save dialog.
3. Add video file: "First taste of chocolate in Ivory Coast.mp4".
4. Use subtitle file: "First taste of chocolate in Ivory Coast.srt".
5. Click Convert/Save -> Convert
6. Change profile settings:
   • Video / Encoding parameters: MPEG-4
   • Audio / Encoding parameters: MP3
   • Subtitles / check "Overlay subtitles on the video"
   • click Save
7. Choose destination file (output.mp4) and click Start.

-> output.mp4 video is created and corrupted!

Alternatively with:

• Video / Keep original video track
• Audio / Keep original audio track

-> output.mp4 is created OK, but NO SUBTITLES are embedded!

I tried using Convert/Save -> Stream option with similar results.