When using WordPress Multisites with Subdomains, you need to ensure the subdomain is added to cPanel/DirectAdmin to be used.

cPanel

You can do this on cPanel via:

cPanel -> Domains -> Create a new domain 

Here you will enter the name for the subdomain and also the document root; this should share the same Document root as the WordPress Multisite:

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This will usually be the public_html directory, but if your WordPress Multisite is based on an addon domain will be located on a different path.

If you've already created the subdomain and need to update the document root from the Domains screen, instead click manage next to the subdomain:

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DirectAdmin

On DirectAdmin the process is similar, add a subdomain via:  

DirectAdmin (User Level) -> Subdomain Management -> Add Subdomain

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/domains/yourdomain/public_html/subdomain
As such once the subdomain is created click the pencil button next to Docroot:


Then set the public_html and private_html to custom and to use the same Document root as the WordPress Multisite:

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Hit save and wait a few minutes as DirectAdmin build the new document root configuration; you should now be able to visit and use the new document root.