I don't know if you've read or heard this, or not, but 'v' is voiced
and 'f' is unvoiced.

To my sensibilities, at least, that is a non-subtle distinction.

That was the point, that what is subtle or non-subtle lies in a person's ear, and that children raised in a language come to regard certain phonetic qualities as important while disregarding other ones.  This becomes fixed at a certain point in the child's development.  To an English ear 'v' & 'f'' are important distinctions, while to a native Icelandic ear they are not.

Tim