It's weird how a SUBtropical system can be named, since it doesn't meet all requirements of being "fully" tropical. I do know what subtropical/extratropical means after Patrick's wonderful explanation in another hurricane thread. I wonder what "requirements/characteristics" of being fully tropical Otto is missing?
Since storms can move from one phase to another, they can temporarily have characteristics of multiple phases. Zach's definition was close, but one element was missing: A subtropical storm has characteristics of both tropical and extratropical cyclones, but it cannot have any fronts! Otto was initially completely extratropical as it was cold-core and asymmetric with fronts and an upper-level trough. Now, it has some tropical characteristics by being more warm-core and symmetric as the fronts are gone, but Otto is a subtropical storm as the upper-level trough is still near the surface low. However, the rising temperatures above the storm should help remove the trough and replace it with a ridge, which will allow Otto to complete its tropical transition, the process of going from extratropical to tropical. The winds are now up to 65 mph as of 11 PM EDT, which is another factor in this transition as explained in the next paragraph.
NHC agreed to recognize and name these storms in 1972, but they weren't fully integrated into our tropical naming convention until 2002. Subtropical storms can be just as devastating and deadly as a tropical storm, which is why meteorologists agreed to recognize them. Not all subtropical storms become fully tropical, but some do complete the transition successfully. I should also point that only subtropical depressions and subtropical storms exist. Hurricanes are always fully tropical, so there's no such thing as a subtropical hurricane! Thus, if Otto reaches hurricane-force winds, it'll automatically jump to a fully tropical cyclone as a hurricane.