In Ignite 2018 Microsoft announced lots of new features, and now is possible to create a modern team site as a sub site in Modern Sites. Microsoft always recommend the use of hub sites instead of sub sites but we all know that with some scenarios sub sites are still required, for that please follow below steps to create sub site.
- Go to Settings and then Site Contents
- Click New and then Sub Site
- Now we can see two Team Site templates, First one without description is out Modern sub site and the classic one is identified as classic experience.
Note: The modern sub site will not be connected to an Office 365 Group