I also wonder if you can simulate a subscription in IPN Simulator, but based on the selection, you cannot simulate a subscription using IPN Simulator.
The best way to simulate a subscription is to create Sandbox test accounts : one for the buyer and one for the seller. You can do this by going to Paypal Developer and going to Applications → Sandbox Accounts.
My test Sandbox accounts: one for the buyer and one for the seller: 
Once you create two test accounts, go to the Paypal Sandbox website website , log in to your test buyer account and create a subscribe button. Wallah! You made. Note. Be sure to set the billing cycle for only 1 day so that you quickly test your IPN Paypal receiver .
Sandbox Subscription Button: 
Sandbox test account email notifications can be seen in Sandbox Notifications notifications .
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