No software does it right now. I think some alpha builds of VLC have support, but it's sketchy. And work is happening on MPC home cinema as well.
MPC-HC does indeed display PGS utilizing its own splitter and appropriate renderer.
The M2TS need not be original for MPC-HC nor PDVD. That is, PGS can be embedded from SUP or even generated from SRT with the likes of tsMuxeR.
How is it configured? Is the renderer EVR Custom Pres or VMR-9 Renderless (or other noted necessary for subs)? Has the PGS been selected during playback from the menu Play - Filters (under the M2TS file listing) or alternately proceeded to the first one with the "S" key? You may also try Reload from the menu Play - Subtitles (can also confirm Enabled there).
Well, I've been using MPC for many years and PGS since introduced. I do include all languages in rips too but only view Engrish so am not sure why there would be a problem displaying others. These days, I actually use XBMC (DSPlayer) on the telly more and MPC-HC on the monitor. Both are controlled with standard Media Center remote codes.