Multisite subfolder problem

Hello people.
I have a couple of years of experience working with WordPress, but couple of days ago I have got a strange request to create a multisite.
I have never worked with this before so I followed the steps by allowing multisite as
define('WP_ALLOW_MULTISITE', true);
and I went through the whole network setup.

Since I have a new installation, I decided to go with subfolder route instead of subdomain.
After copying and pasting correct data into the wp-config.php and .htaccess I was able to see the network setup.

Now, I added a site to the network and tried to access it. All I get is a blank directory listing.

What I don’t understand is do I need to install WordPress into this directory as well or not and if not where did I go wrong.

Thank you in advacnce.