So it would be nice to allow users to host their sub-domains, because some of my users really want to do that
Agreed, I see no reason to prohibit users choosing any valid domain name, including sub-domains. When one of my users first encountered this error, when choosing "I own domain and will update nameservers" I thought a simple DNS lookup to verify the domain is valid would be sufficient. After all, user has already said they own domain and can manage name servers; so don't limit their ability to use their own domain as they see fit.
Just recognized this restriction after reading this request. Had never issues with that but I´m surprised that this is not possible.
Should be changed.
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