I want to set up my virtual hosts in a way so that I don't have my projects in the htdocs folder and I would like to use subdomains to get to them. So for example instead of going to "http://localhost/myproject" which would be located inside "/xampp/htdocs/myproject", I'd rather like to go to "http://myproject.sites.local" which would be located inside "/Users/myname/Projects/myproject".
I know I have to go to httpd.conf inside the "etc" folder in xampp and uncomment the line that includes virtual hosts, done that. Then I went to "/etc/hosts" file to add "127.0.0.1 sites.local" and after that I have this chunk of code inside my httpd-vhosts.conf file:
<Directory "/Users/marioplantosar/Projects">
Options Indexes MultiViews FollowSymLinks
AllowOverride All
Require all granted
</Directory>
<Virtualhost *:80>
VirtualDocumentRoot "/Users/marioplantosar/Projects"
UseCanonicalName Off
</Virtualhost>
<Virtualhost *:80>
VirtualDocumentRoot "/Users/marioplantosar/Projects/%1"
ServerName sites.local
ServerAlias *.sites.local
UseCanonicalName Off
</Virtualhost>
The first part works I guess because if I visit "http://sites.local" it opens the Projects folder root (it just lists the subfolders because there is no index file inside of the "Projects" folder. But the other part is not working and it just throws the "ERR_NAME_NOT_RESOLVED" error. So I have the wildcard "*" in the ServerAlias so that it catches every subdomain of sites.local, and I use the "%1" to open the corresponding folder inside "Projects" folder, however it's just not working. The weirdest part is that it worked for months up until yesterday and I have no idea what happened that it just suddenly stopped working.
I figured out the problem. Everything I wrote in the question was configured correctly, but since I was doing all of that little over a year ago I totally forgot about the dnsmasq part which somehow got messed up. "hosts" file doesn't support wildcards so you have to use a tool like dnsmasq that does the dns masking automatically for every folder inside my "Projects" folder.
For anyone that gets into a similar situation like me, you configured everything in httpd-vhosts.conf, httpd.conf and hosts files correctly but it's not working you should follow this tutorial to set up the dnsmasq: https://passingcuriosity.com/2013/dnsmasq-dev-osx/