AlpineHost
cPanel automatically creates a subdomain for an addon domain - that's required for it to work. Quote:
"An addon domain requires a subdomain in order to use a separate document root."
It automatically recognizes if you are adding a subdomain for an existing domain (or an existing addon domain), in which case it won't create a sub-subdomain (did I explain this clearly?). But for additional domains, it creates a subdomain automatically.
So, if your main domain is example.com
You can create stage.example.com as a subdomain and all is good.
If, on the other hand, you wish to create a test.com domain, it will also create a test.com.example.com subdomain.
So, as far as I know, you need to have the sudomain limit be at least as high as the addon domain limit for all the addon domains to work properly.
At least based on my knowledge and experience as a shared and reseller hosting customer. I'm not a hosting provider and don't have access to the latest cPanel/WHM server setup and admin logs, nor docummentation (could google that, but never needed it).
Relja