The problem is that when you install a master in a subdirectory of a domain then you can no more used this domain in a slave site domain.
You have to install the master website in a directory beside you "main" domain and use for example a subdomain like "master.domain.com" that you locate in a specific place that does not create conflict in terms of domain name dependencies.
In addition want to create a slave site definition that will be stored in a "parent" directory may create link definitions with name conflicts.
It is not possible to want creating a slave site "
www.domain.com" that is a slave of "
www.domain.com/master".
If you would arrive to decribe such
www.domain.com into JMS, this will convert the
www.domain.com/master as a slave site as the "
www.domain.com" would be recognized as a slave.