I dont really understand why this works but the below fixed my issue:
RewriteBase /
RewriteCond %{HTTP_HOST} !^subdomain
RewriteCond %{REQUEST_URI} !^public
RewriteRule ^(.*)$ public/$1 [L]
RewriteCond %{HTTP_HOST} ^subdomain
RewriteCond %{REQUEST_URI} !^public
RewriteRule ^(.*)$ public/ [L]
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