Using this network mask 255.255.255.0, I can steal 2 bits from the host bits to make 4 subnets. Now I've never seen it but is it also possible to use the NWMask 255.255.0.0 and also create 4 subnetworks from this by stealing hostbits?
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Yes. You can divide any network greater than /32 (255.255.255.255) into smaller subnets.
Remember that the subnet mask is just a 32-bit binary number: 1111111111111111000000000000000. We write this using dotted decimal (255.255.0.0) to make it easier to read, but the dots have no significance.
Nowadays, its more common to write the subnet mask using the slash notation, where you simply use a slash and the number of ones in the subnet mask.
So for example, 192.169.0.1 255.255.255.0 becomes 192.168.0.1/24 And 192.168.1.32 255.255.0.0 becomes 192.168.1.32/16
The number after the slash indicates the size of the mask.

Ron Trunk
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