Membership Plugin + New Blog Template

Multi site 3.1.2
Membership V 2.0.2
New Blog Template Version 1.2.3

New blog Template works if the Super Admin sets up a site, great.
But when a new user pays & signs up for a new site, they are created as a sub site for the Super Admin and given admin access to the main domain. (eg

I want the subsite to have its own admin and site name using the default blog template. (eg

I saw this thread
and as suggested I uploaded the new blog template files to the MU folder. FTP file structure looks like this:


but it still only creates a site under the Super Admin. It never asks for the site name on the sign up process, only the user name and password. How do I fix this? Thx.