I finally got around to setting up a Network / MU testing environment. Both sudirectory and subdomain setups are the same as far as BPS goes. BPS only needs to be activated for the primary site and should not be available to any of the subsites.
As long as the primary site / parent site has BPS BulletProof Modes activated then all the subsites will automatically be protected. So there is no need to make BPS available to the subsites and actually it caused a problem in the testing environment that i was using. One problem was that if BPS is available and fully functional in the subsites then if you use AutoMagic to create a new Master .htaccess file it will create a new Master .htaccess file based on the subsite’s URL, which is not really a literal URL.
I see that there are MU plugin managers out there so I will experiment with those, but I think the best approach is just to allow BPS to display in the subsites, but not allow any functions to work in a subsite. ie activating BulletProof Modes, backup and restore, etc. That coding will be included in the next release of BPS. Thanks.