We explore the effect of the subwell centers and related carrier dynamics mechanisms in dislocation-free DUV AlGaN/AlGaN multiple quantum wells (MQWs) homoepitaxially grown on an AlN substrate. Cross-sectional imaging and energy-dispersive X-ray compositional analyses using scanning transmission electron microscopy (STEM) reveal epitaxial layers of very high crystalline quality, as well as ultrathin Al-rich subquantum barrier and subwell layers at the interface between the wells and the barriers. Carrier dynamic analyses studied by power- and temperature-dependent time-resolved and time-integrated photoluminescence (PL) and PL excitation measurements, as well as numerical simulations, reveal the carrier repopulation mechanisms between the MQWs and subwell sites. This advanced analysis shows that the subwell/sub-barrier structure results in additional exciton localization centers, enhancing the internal quantum efficiency via staggered carrier repopulation into the MQWs to reach a maximum of ∼83% internal quantum efficiency, which remains high at high injected carrier densities in the droop region. Both experimental and numerical simulation results show that the slight efficiency droop can be due to Auger recombination, counteracted by a simultaneous increase in radiative recombination processes at high power density, demonstrating the role of the subwells/sub-barriers in efficiency enhancement.