This is effectivelly possible but you need to have a dedicated server and configure it to allow VirtualDocumentRoot.
We already did that for dedicated server using cPanel and WHM.
This require a root login and potentiall require to rebuild the apache.
So create subdomain automatically is more related to the HTTP Server than to Jms Multi Sites. Once your server is able to have specific "document root" computed automatically based on the subdomain then you can setup a rule in JMS to deploy the website into the directory that you will have computed in the "Virtual Document Root"
If you want that we help you configure your sever for such "Virtual Document Root" on a cPanel + WHM, this is possible with our billable support that you can order at
www.jms2win.com/en/joomla-multisite?page...35&category_id=1