The secret to the subtract tool is layers. Depending on which layer of your design is in the foreground and which is in the background will determine what piece is 'subtracted.'
For this example, since I wanted M and B to have subtracted areas, I made sure the '&' was 'in front.'
Okay lets get started.
Open Silhouette Studio.
I used the striped ampersand (design #56769) that was one of the free designs offered during the Silhouette Online Store's sale recently. Here's what it looked like originally. I ungrouped and released the compound paths to delete all the diagonal lines. If you didn't get this design you can use any ampersand from a font or go download it now and come on back.
Once the ampersand was ready in Silhouette Studio, I added my M and B. I typed them each separately so I could position them freely without them being grouped.
I resized the letters and then overlapped them with the ampersand so it looked like this.
I then brought the & to the front (highlight the & only > right click > bring to front). It's important to remember that the image(s) you DO NOT want sections deleted from need to be in the front.
Now it's time to start subtracting. Click the 'Open the Modify Window' icon along the top tool bar. I highlighted my entire design at once and clicked 'Subtract All'. You must highlight/select the foreground image and the background image at the same time for the subtract all or subtract tools to work. Highlighting only the image you want the cuts made from will not work.
Here's a closer view at the subtracted area and how it comes together.
Now if you're wondering what the difference is between 'Subtract' and 'Subtract All' this is how the Silhouette manual describes each:
Subtract: This option will remove all overlapping parts of images that are in front of
other images, so that only the image located in back will remain with the overlapping
Subtract All: This option will remove any portion of an image that is in back behind another image
I find a graphic more easy to understand so here's one I created to show the effect you get on a single design depending on what's in the foreground and background and whether you use the 'subtract' or 'subtract all' tool. Note: The top images included two circles originally, but one of the circles is no longer visible after using the subtract tool.