Ah, I wonder if it has to do with the fact that DreamHost requires you to “configure” the second-level domain (SLD) name in your control panel.
For example, I host lensman.example at another webhost, but host wiki.lensman.example at DreamHost because I like the one-click install process. In order to set this up at DreamHost, I had to add the lensman.example SLD at DreamHost and then specify “no hosting” for that domain. Only then could I add wiki.lensman.example as the subdomain or third-level domain.
So maybe the problem is the DreamHost domain management software has a limitation where you have to have control of the SLD in order to host third-level domains here - with the exception of example.dreamhosters.com third-level domains.
This is, of course, a very unfortunate limitation for country-code top-level domains where it is common to buy third level domains on top of the com.ccTLD (com.py for example) from local registrars.
BTW, does anyone else have experience with these domains? Do you typically get to manage the sub-sub-domains?
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