They work by copying one repo inside another and providing tools to copy/sync it back out again. It's not a link, it's a copy. It's almost the same as copying the files into your repo and git add'ing them, but there are accounting and tools to pull changes from the subrepo back to the external repo.

The trade-offs are relatively obvious. It'd be a poor option for Yocto, but is a better option for most corporate repos.

Oh, I didn't want to vendor another repo into mine, I just want to store a reference to it. I'll keep using submodules then, as they're easier to work with than tools like gclient and repo.

I really don't get the hate. They're not hard to work with. Just a bit shitty UX but if you're using Git you're used to that already.