Unable to create subdomain with existing domain

When I try to create a new web domain (either from the control panel or CLI) for a subdomain under an existing domain, I get the error “DNS domain example.com exists”. I am using a DNS cluster. I also tried adding an A record to the existing domain’s zone prior to creating the sub domain but that didn’t seem to make any difference.

Any ideas?

Disable Enforce subdomain ownership in system settings

Server setting / Config — Hestia Control Panel documentation