Multi sub-level directories causes infinite redirect (Server 500 errror)

https://www.drupal.org/node/2718711 has allowed us to create multi-sub level directories.

I created sites as follows

client1-sac.uksouth.cloudapp.azure.com as http://client1-sac.uksouth.cloudapp.azure.com
site1.client1-sac.uksouth.cloudapp.azure.com with an alias of http://client1-sac.uksouth.cloudapp.azure.com/site1
subsite1.site1.client1-sac.uksouth.cloudapp.azure.com with an alias of http://client1-sac.uksouth.cloudapp.azure.com/site1/subsite1

The first two work and return drupal websites. The third shows the following message

Internal Server Error

The server encountered an internal error or misconfiguration and was unable to complete your request.

Please contact the server administrator at root@localhost to inform them of the time this error occurred, and the actions you performed just before this error.

More information about this error may be available in the server error log.

The apache logs with lots of debugging say this, but I cant figure out what its meant to be doing or is doing wrong...

[Wed Dec 07 08:46:25.801344 2016] [http:trace4] [pid 49275] http_request.c(305): [client 137.108.145.21:34266]   Connection: keep-alive
[Wed Dec 07 08:46:25.801395 2016] [rewrite:trace2] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] init rewrite engine with requested uri /site1/subsite1/
[Wed Dec 07 08:46:25.801406 2016] [rewrite:trace3] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] applying pattern '^/files/(.*)$' to uri '/site1/subsite1/'
[Wed Dec 07 08:46:25.801424 2016] [rewrite:trace3] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] applying pattern '^/robots-vhost-root.txt' to uri '/site1/subsite1/'
[Wed Dec 07 08:46:25.801430 2016] [rewrite:trace1] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] pass through /site1/subsite1/
[Wed Dec 07 08:46:25.801521 2016] [core:trace3] [pid 49275] request.c(304): [client 137.108.145.21:34266] request authorized without authentication by access_checker hook and 'Satisfy any': /site1/subsite1/
[Wed Dec 07 08:46:25.801538 2016] [rewrite:trace3] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] [perdir /site1/subsite1/] add path info postfix: /var/aegir/platforms/client1-7.34/subsite1 -> /var/aegir/platforms/client1-7.34/subsite1/
[Wed Dec 07 08:46:25.801542 2016] [rewrite:trace3] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] [perdir /site1/subsite1/] applying pattern '^/var/aegir/platforms/client1-7.34/(.*)$' to uri '/var/aegir/platforms/client1-7.34/subsite1/'
[Wed Dec 07 08:46:25.801562 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] [perdir /site1/subsite1/] RewriteCond: input='/var/aegir/platforms/client1-7.34/subsite1' pattern='!-f' => matched
[Wed Dec 07 08:46:25.801566 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] [perdir /site1/subsite1/] RewriteCond: input='/var/aegir/platforms/client1-7.34/subsite1' pattern='!-d' => matched
[Wed Dec 07 08:46:25.801570 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] [perdir /site1/subsite1/] RewriteCond: input='/site1/subsite1/' pattern='!=/favicon.ico' => matched
[Wed Dec 07 08:46:25.801576 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] [perdir /site1/subsite1/] RewriteCond: input='client1-sac.uksouth.cloudapp.azure.com' pattern='!^site1-subsite1-subdir$' [NC] => matched
[Wed Dec 07 08:46:25.801579 2016] [rewrite:trace2] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] [perdir /site1/subsite1/] rewrite '/var/aegir/platforms/client1-7.34/subsite1/' -> '/site1/subsite1'
[Wed Dec 07 08:46:25.801584 2016] [rewrite:trace1] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cec0b0/initial] [perdir /site1/subsite1/] internal redirect with /site1/subsite1 [INTERNAL REDIRECT]
[Wed Dec 07 08:46:25.801650 2016] [rewrite:trace2] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] init rewrite engine with requested uri /site1/subsite1
[Wed Dec 07 08:46:25.801655 2016] [rewrite:trace3] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] applying pattern '^/files/(.*)$' to uri '/site1/subsite1'
[Wed Dec 07 08:46:25.801658 2016] [rewrite:trace3] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] applying pattern '^/robots-vhost-root.txt' to uri '/site1/subsite1'
[Wed Dec 07 08:46:25.801661 2016] [rewrite:trace1] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] pass through /site1/subsite1
[Wed Dec 07 08:46:25.801685 2016] [core:trace3] [pid 49275] request.c(304): [client 137.108.145.21:34266] request authorized without authentication by access_checker hook and 'Satisfy any': /site1/subsite1
[Wed Dec 07 08:46:25.801693 2016] [rewrite:trace3] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] [perdir /site1/subsite1/] applying pattern '^/var/aegir/platforms/client1-7.34/(.*)$' to uri '/var/aegir/platforms/client1-7.34/subsite1'
[Wed Dec 07 08:46:25.801699 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] [perdir /site1/subsite1/] RewriteCond: input='/var/aegir/platforms/client1-7.34/subsite1' pattern='!-f' => matched
[Wed Dec 07 08:46:25.801703 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] [perdir /site1/subsite1/] RewriteCond: input='/var/aegir/platforms/client1-7.34/subsite1' pattern='!-d' => matched
[Wed Dec 07 08:46:25.801707 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] [perdir /site1/subsite1/] RewriteCond: input='/site1/subsite1' pattern='!=/favicon.ico' => matched
[Wed Dec 07 08:46:25.801711 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] [perdir /site1/subsite1/] RewriteCond: input='client1-sac.uksouth.cloudapp.azure.com' pattern='!^site1-subsite1-subdir$' [NC] => matched
[Wed Dec 07 08:46:25.801714 2016] [rewrite:trace2] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] [perdir /site1/subsite1/] rewrite '/var/aegir/platforms/client1-7.34/subsite1' -> '/site1/subsite1'
[Wed Dec 07 08:46:25.801718 2016] [rewrite:trace1] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf3b70/initial/redir#1] [perdir /site1/subsite1/] internal redirect with /site1/subsite1 [INTERNAL REDIRECT]
[Wed Dec 07 08:46:25.801736 2016] [rewrite:trace2] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] init rewrite engine with requested uri /site1/subsite1
[Wed Dec 07 08:46:25.801740 2016] [rewrite:trace3] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] applying pattern '^/files/(.*)$' to uri '/site1/subsite1'
[Wed Dec 07 08:46:25.801748 2016] [rewrite:trace3] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] applying pattern '^/robots-vhost-root.txt' to uri '/site1/subsite1'
[Wed Dec 07 08:46:25.801751 2016] [rewrite:trace1] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] pass through /site1/subsite1
[Wed Dec 07 08:46:25.801770 2016] [core:trace3] [pid 49275] request.c(304): [client 137.108.145.21:34266] request authorized without authentication by access_checker hook and 'Satisfy any': /site1/subsite1
[Wed Dec 07 08:46:25.801775 2016] [rewrite:trace3] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] [perdir /site1/subsite1/] applying pattern '^/var/aegir/platforms/client1-7.34/(.*)$' to uri '/var/aegir/platforms/client1-7.34/subsite1'
[Wed Dec 07 08:46:25.801781 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] [perdir /site1/subsite1/] RewriteCond: input='/var/aegir/platforms/client1-7.34/subsite1' pattern='!-f' => matched
[Wed Dec 07 08:46:25.801787 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] [perdir /site1/subsite1/] RewriteCond: input='/var/aegir/platforms/client1-7.34/subsite1' pattern='!-d' => matched
[Wed Dec 07 08:46:25.801791 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] [perdir /site1/subsite1/] RewriteCond: input='/site1/subsite1' pattern='!=/favicon.ico' => matched
[Wed Dec 07 08:46:25.801794 2016] [rewrite:trace4] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] [perdir /site1/subsite1/] RewriteCond: input='client1-sac.uksouth.cloudapp.azure.com' pattern='!^site1-subsite1-subdir$' [NC] => matched
[Wed Dec 07 08:46:25.801798 2016] [rewrite:trace2] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] [perdir /site1/subsite1/] rewrite '/var/aegir/platforms/client1-7.34/subsite1' -> '/site1/subsite1'
[Wed Dec 07 08:46:25.801801 2016] [rewrite:trace1] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cf7de0/initial/redir#2] [perdir /site1/subsite1/] internal redirect with /site1/subsite1 [INTERNAL REDIRECT]
[Wed Dec 07 08:46:25.801824 2016] [rewrite:trace2] [pid 49275] mod_rewrite.c(468): [client 137.108.145.21:34266] 137.108.145.21 - - [client1-sac.uksouth.cloudapp.azure.com/sid#7fa6c5a260e8][rid#7fa6c5cfbdd0/initial/redir#3] init rewrite engine with requested uri /site1/subsite1