zuriatman,
I agree with every one of your statements, except [Your sub-domain directory should be empty]
I did use the CP (addon domains) process, to create the addon domain, but it automatically created a subdomain, without any action on my part! The automatically created subdomain is still residing in the subdomain directory and yet, my addon domain does work as a stand alone domain!
Every step you outlined in your response was done and this was the result.