login on subdomain redirects to prosites upgrade page

Totally bizarre. Just created a subdomain via wp-signup.php and then tried to log in. Got redirected to the pro sites sales page instead!

I'm also noticing that the newly created subdomain is NOT marked as Free which is the lowest level I have. Guessing these two things are connected, right?

If so, how can I make all new subdomains have the free level by default? Don't see any checkboxes for this.