I was aware of the need to be careful with Symbolize. The problem was getting it to work in a buttonm which then forms part of a palette that sets up my Notebook the way I want it to do engineering calculations. With a little help from tech support and Notebook assistant, I have settled on the following code.

subscriptButton = DynamicModule[{isPressed = False},
    Button[
       Style[Subscript[X, y], FontSize -> 16],
       (
         isPressed = ! isPressed;
          Symbolize[ParsedBoxWrapper[SubscriptBox["_", "_"]]]
        ),
       Appearance -> {"DialogBox", "Palette"},
       FrameMargins -> 0,
       Background -> 
    Dynamic[If[isPressed, RGBColor[1, 0.9, 0.8], White]],
       ImageSize -> 92,
       Method -> "Queued"
   ],
    Initialization ->  Needs["Notation`"]
  ]