RIP version 1 can handle subnets, but only by making assumptions. For a start, it can only handle subnets of the same major network as the interface where it received the advertisment. (Advertisments for any other major networks are treated as classful.) If the advertised subnet and the interface are on the same major network, then it assumes the subnet mask of the advertisment is the same as that of the interface on which it was received.
So, if your interface is, say 172.16.0.17/28, and you receive an advertisment on it for the subnet 172.16.0.128, then you assume the advertisment means 172.16.0.128/28.
That is why if you are using RIPv1 and subnetting, you should use the same subnet throughout the major network, and the major network should be contiguous.
Kevin Dorrell
Luxembourg