Is it possible for 2 VMs to be provisioned in 2 different regions (West & North Europe) and still keep them in the same availability set?
Is region the correct word to refer to the datacenter(s) in North Europe or should it be called sub-region?
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An availability set is limited to a specific deployment (cloud service, if you will). And, really, it's about partitioning of VMs across different fault zones (e.g. not placing all your VMs in the same physical server or rack), as well as ensuring that, when the host OS is updated, not all VMs are taken offline at the same time. So... the concept of Availability Set doesn't really apply when dealing with multiple regions (regions do their host OS updates during different time windows, generally speaking so, again, it doesn't apply).
Also: You're correct in calling them regions. There is no concept of a sub-region: North Europe and West Europe, in your example, are completely different regions, separated by hundreds of miles (coincidentally, they are paired for geo-redundancy purposes).