> If someone uses H<sub >2</sub >O, what will print in the pdf? 

The "correct" thing.

We will auto convert HTML -> TeX Whenever possible.

When preparing a page for printing we already know that <sub > should become:
 \ensuremath{_{ 

and </sub > should be:
 }}

> Isn't it
> more advisable that people create their webpages using <m >/ensuremath
> H/subscript{2}0</m > instead?

Nope.  In fact it is unadvisable, since it is much easier to go from
HTML -> TeX, then from TeX -> HTML/XML

Especially if the lonxml parser throws no warnings about the page.

We want them to be able to use as much HTML as possible, and as little
TeX as neccesary. We only suggest using TeX and (<m ></m > ) if it is
difficult or nearly impossible to do in HTML. And
<tex ></tex ><web ></web > if it is impossible to do something in HTML.