The object of a preposition cannot be the subject of a sentence. Period. There is nothing to discuss. It is a rule.

Learn it.

But, consider this sentence: “‘Legends of the Fall’ is my favorite movie.” The subject of this sentence is “Legends of the Fall”. “Fall” is the object of a preposition. So, in this case, the object of a preposition is PART of the subject. But not the complete subject.

I diagrammed sentences in middle school, and although there are many different types of subjects (e.g. gerunds, as in the sentence “Writing is easy.”), I don’t think the subject could ever be the object of a preposition.

In my opinion, anyone who thinks it’s possible should provide a convincing example.

Ex: Going up the hill is one of my favorite activities.

Hill is not doing the “ising.” “Going” is doing the “ising.”

And so you’ll find it in every example you can cite.

A prepositional phrase modifies something that can be the subject, but the object of the preposition itself is not the subject of a sentence.

As for the debate between you and your teacher, I say, “Show me the money!” That is, cough up the example that proves your point. Where’s the beef! Put up or shut up! (Unless of course your grade depends on YOUR TEACHER’s being right!)