lrx!
My goal is to host this second Wordpress website on https://domain/myfolder.
...
I am able to redirect subdomain.domain.com to https://domain/myfolder but then I get a 404 error...
I think this is because this URL structure can be either for a normal page/post URL or sub-directory subsite URL in a WordPress multisite installation (which is actually and easily supported by Runcloud - though dealing with WP multisite on subdirectories is trickier than multisite on some domains).
I have many WP single sites and several multisites on Runcloud, and I will encourage you to reflect on the goals you are trying to achieve, because what you are saying you're trying to do is unusual and maybe a little bit hacky (although I admit I've tried to do it when I started dealing with the WP beast, around 13 years ago).
You'd better open a ticket on Runcloud and they will answer promptly and quickly, as they usually do.
God bless!