It's probably intentional. Before satellite based navigation there was no quick and sure way to know where one's ship or submarine actually was and having your ship's position accurately placed on the navigation map helps one do things that real U-boats could not. So it's a realism thing.
If you want get your ship back visible you can edit your OLC. You need to copy your SH3 original files to OLC's mod. The files are unitsub.tga, unitsubl.tga and unitsubm.tga and you can find them in folder data/menu/gui/units. OLC's unitsub.tga's are just empty pictures, the original ones have a small picture of a submarine on them.
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