Anyone who rides the subway likely knows that it's against transit rules to make loud noise. You don't need to look it up. These rules are there for good reasons. Bold people can sometimes get away with making money by breaking law but we don't hav to support them just because they a successful.
I don't live in New York, but in my city any loud or disruptive noise is against the rules and can be fined. I think this is a good policy consider the purpose of the subway. However I do wish there were more public places where people could freely be loud and obnoxious. But the subway is not an ideal forum for this.
I don't have any problem with the guy personally, I think he is ethically justified, considering his poverty background. However I don't think this is a tactic that should be emulated by well-educated entrepreneurs. Breaking important social rules to make profit is rarely beneficial on the whole.
Could you point to where it is explicitly stated that this is so, remembering that this is performing music for profit.
Is this covering the US copyright position too?
In the UK, if they're performing on the street they'd need a street performance license (local authority) and a music license to cover the copyright of the writers (from PRS). You might need a second license if you were imitating a particular performance (from PPL).
From your link "not performing in subway cars" is given explicitly as one of the Government regulations that accords with the First Amendment.
This appears to contradict the spirit of your comment if not the letter. The GP stating that singing wasn't allowed "on the subway" and you replying that it explicitly was allowed "in the subway". I can see how you can both be right and individually agree with your link too though so the above is really just for clarity.
