Subdomain redirects to the main domain (Apache2) - php

Question

I asked this question to DigitalOcean questions section but did not get an answer, so I am trying my luck with you guys. Here it goes:
I know this question has been asked at least a million times, but I tried all the solutions or recommendations that I could find and it still doesn't work.
The droplet is using Ubuntu 16.04, I am trying to setup sub domain with a virtual host in Apache2.
At first, I followed this DigitalOcean tutorial How To Set Up Apache Virtual Hosts on Ubuntu 16.04.
On top of that, I created A record in domain panel with a hostname of sub.example.com pointing to my droplet.
I noticed when I type sub.example.com shows my main domain, which is on main domain or exactly running on Nginx. URL in URL bar stays sub.example.com
I checked my /etc/hosts file and added an entry like this (last one):
127.0.1.1 blog blog
127.0.0.1 localhost
123.345.554.21 www.sub.example.com sub.example.com
My virtual host file looks like this:
ServerAdmin admin#example.com
ServerName sub.example.com
ServerAlias www.sub.example.com
DocumentRoot /var/www/sub.example.com/public_html/
<Directory /var/www/sub.example.com/public_html>
Options Indexes FollowSymLinks MultiViews
AllowOverride all
Order allow,deny
allow from all
Require all granted
</Directory>
ErrorLog ${APACHE_LOG_DIR}/error.log
CustomLog ${APACHE_LOG_DIR}/access.log combined
# vim: syntax=apache ts=4 sw=4 sts=4 sr noet
I used a2ensite command to enable the site. I tried using the command with .conf extension and without. I disabled default .conf file (000-default or something like that).
I tried adding .htaccess file in my project directory with this in it:
RewriteEngine on
# redirect to https www
RewriteCond %{HTTPS} off
RewriteCond %{HTTP_HOST} ^(?:www\.)(domain\.com)$ [NC]
RewriteRule ^ https://www.%1%{REQUEST_URI} [R=301,L]
# redirect to http subdomain
RewriteCond %{HTTPS} on
RewriteCond %{HTTP_HOST} ^((?!www).+\.sub.domain\.com)$ [NC]
RewriteRule ^ http://%1%{REQUEST_URI} [R=301,L]
Paths to the document root are correct and double-checked, and even if I change to incorrect route, nothing happens. I restarted apache2 service and droplet more times than I can count. I added permissions to the directory.
I don't know what should I do anymore. Maybe I am missing something? Is it maybe because my index file is a .php file?
Anyways, thank you for your help!