I just bought an '01 Legacy a few months ago. I noticed a slight knocking sound especially when the engine is cold. I read a little about people having "piston slap" and replaced the pistons. Others say it's normal and the noise goes away when the engine warms up as the pistons expand. I didn't think much of it until my check engine light came on. it gives me a knock sensor error. Has anyone heard anything on this issue?

If it's a slight metallic rasp that eases off as the engine heats, it's ok. Sounds a bit like a Diesel engine.

 

The knock sensor code is probably just co-incidence. Check the one you have now, if the connector on the wire is gray, it's the old type and needs replacing anyway.

it sounds more like a knock than a lifter tap.

It would be more unusual if you had a 2001 that did not slap until warm. Most of them do including my own phase 2. I was able to cut it down a bit with Mobil 1 15-50 which might not be a winener in cold climates. Most manufacturers are having piston slap problems from shortening the skirts to meet EPA regulations. Don't feel like the Lone Ranger out there. A friend's Honda makes mine look quiet.

Knock sensors are fairly cheap and extemely common failure points. Not just on Subies either, I just changed one on a BMW.

It gives you the code for a reason, the car is asking for a knock sensor so be a kind owner and give it one.