It's about more than that. It is about having a separate wildcard handler for domains which do not have their own DNS entries, which will route http requests for existing domains.
For example, you run example.com, and you have users able, baker, and charlie. One thing you might do is to set up DNS entries in example.com for able.example.com, baker.example.com and charlie.example.com.
Another thing you might do - the thing they appear to be driving at in this claim - is to simply wildcard the third-level domains above example.com, route all http requests for third-level domains to a designated address, and have that server configured to provide the content for able, baker, or charlie, based on the address specified in the http request. That way, if you have a dynamic user base, you don't have to be constantly messing with your DNS table for example.com.
Is that "a patent on subdomains"? No.
Now, I haven't looked at the other independent claim, nor have I considered the prosecution history of the patent at the USPTO, among other things that can be relevant considerations in considering the scope and/or validity of this patent. However, claim 1 at least, appears to be trivially avoidable.