Example scenario: I would like to hide a sub-navigation menu if the user has javascript enabled so that it can be revealed on a click of a navigation link further up in the nav
Can this be done using LESS?
Yes.
The code you provided works in LESS. The & combinator works the same.
In the end, the selectors generated for:
div.subnav { ... html.js & { ... } }
will be:
div.subnav { ... } html.js div.subnav { ... }