When you create a subdomain, if you choose the custom directory option and point it to an existing domain's folder, it will overwrite at least the existing domain index.htm file (not sure about other files) so that when you go to the original domain you will now see the subdomain placeholder file instead of the original domain index file.
It would perhaps be better to only use the subdomain placeholder index file if the new folder location does not already exist.
It would perhaps be better to only use the subdomain placeholder index file if the new folder location does not already exist.