Yep.
In practice, the police don't care about incall flats used by one person, sublet or not. If it is subletting, the owners may well care, and many flat leases have something in them about not being used for business / immoral purposes.
Once someone else uses it, even if not at the same time, it's a 'brothel'. The police probably still won't care, but you've made it a bit more likely.
In either case, if something happens and your insurance company finds out you haven't told them what's going on, they can use it as an excuse for not paying out.