How to remove extra line space on GitHub markdown bullets/lists?
You cannot do this going from a primary to secondary item. It is possible from a secondary to tertiary list, however. This is due to GitHub's styling of the markdown, not an inherent issue with the markdown itself.
See this document for details on what is possible regarding different layout styles.
You need to indent the sublist with at least 4 spaces:
1. First item
* subitem
2. Second item