Well on localhost there could be any of the checks :
1 . check if network settings you allowed to create sites and user both .
2 . check indexblank.php file fix .
3 . groups component enabled in it .
4 . buddypress , vibebp and wplms plugins are not network activated .
Well the site does not exists this must be something from the wordpress itself , theme and plugin do not overwrite this .
Secondly I would recommend you to create another multisite from scratch , it seems many things on the localhost is not working .
Also note that on localhost the subdomain multisites does not works only directory multisites work.