No, the subdomain is no problem. But I cannot figure out what is...
Funny thing: the first time I tried to access your sitemap, I got redirected to the English about page. Only after accessing the Estonian pages, I could visit the sitemap. You can reproduce this issue by testing your /sitemap.xml via http://web-sniffer.net (for example) where you can see the response is:
<!DOCTYPE HTML PUBLIC "-//IETF//DTD HTML 2.0//EN">
<p>The document has moved <a href="http://xxx.xxx.xx">here</a>.</p>
<address>Apache / DataZone Server at xxx.xxx.xx Port 80</address>
instead of the requested sitemap...
I wonder if it is a particular setting in Polylang or if you set up a redirect manually? Or is it maybe the fact that there are NO posts in the English language? WordPress is known to behave badly (returning 404 on feeds for example) when there are no posts.
Try disabling the language slug in post/page URLs and make the home page URL default to the / and /en/ locations. And maybe test the auto-detect visitor language option. Let me know if/when that changes anything :)