The problem only occurs when the widget is displayed in it’s own sidebar. If there are no sub-pages to the current page the sidebar (which should be empty – and hence not displayed) appears. I could not seem to find a way to override this so I created a little addition to the existing code. If there are no subpages, display a small (user-defined) tagline instead. I made one other change to include this widget on all pages/posts so that if there are no subpages, the tagline will always be present.
For example, the tagline appears above the search box in the sidebar. IF you visit one of the demo pages, you will see the widget in all it’s glory.
The widget (my version) can be found here: subpages-widget