looks like none of the polys in the model are connected to each other (you should be able to test that by selecting any one poly and trying a Select Connected – or just move it and see if it is just an ‘island’) – if that’s true that’s what the SubD is working on, each separate poly by itself. You’d want to try an Optimize in that case, if the points of polys that are right beside each other are close enough that should work