Meaning of y’s and i’s

It's referring to the way that the names are spelt. For instance Linda and Lynda, Fiona and Fyona, Tony and Toni. Andy and Andi. "Sub out" either compares the changing of the spelling from the more common to less common version with the process of "sub editing" in publishing, particularly newspapers or refers to "substituting" one for the other.

I find it a little difficult to work out the direction of the change referred to by "sub out" because it could mean replacing 'y's with 'i's or the other way around. Also some names are normally spelt with a 'y' and some with an 'i' both in the middle of and at the end of a name so it's hard to see what general rule "Rachel" is proposing.