Okay thanks for sending your data. It seems there are a couple of issues related to your watersheds layer.
First, there was one feature in there (Morocco) that does not represent a watershed, and overlaps all of the others. That was not directly causing this error, but I don’t think you will get valid results with that polygon.
Second, there were some invalid geometries in the other watershed polygons. A future version of InVEST handle’s that problem more elegantly, without crashing, but for now I removed those invalid vertices and successfully got past that step of the model. I also noticed that some of the watersheds slightly overlap each other, or have small gaps between them. That might not be a problem, but you might also consider a better datasource for the waterhsed polygons.
Attached is the layer with fixed geometry. Try_subwatershed.zip (40.9 KB)