does this work in sub-directory?

That page in the Codex refers to a bunch of possible configurations, but the good news is it is easy to figure out what you need to do with this plugin.

If your root site is still going to WordPress (when you go to example.com, it is WordPress creating the page), then you can use it as usual.

If your root site is not WordPress (when you go to example.com, and something besides WordPress creates that page), then you need to use a differnet method to redirect those hits to WordPress. This isn’t that hard, search for “domain redirects” or something like that, and you will find documentation on redirecting traffic, depending on your web server (Apache is common).

I don’t know what you are building, but I do know that I probably wouldn’t put WordPress in a sub-directory. Not because it is technically wrong or anything, just that WordPress can do most of what any web page can do on the full domain (i.e. example.com), and after a while most folks end up moving it there anyhow.