Your setup is incorrect: the subdomain you provided is not connected to your WordPress multisite installation at all.
Note that WordPress multisite subdomains are virtual, so you should NOT create a physical subdomain on your file system with its own document root. All you need is a DNS subdomain that forwards to your primary domain.
The easiest way to do this would be to have a CNAME record for the subdomain going to the apex domain in your DNS zone. That is:
retouch.katerinamarie.com CNAME katerinamarie.com
Or if you want to do this for ALL subdomains (instead of one subdomain at a time):
*.katerinamarie.com CNAME retouch.katerinamarie.com
Again, no need to have an actual subdomain on the file system.
If you can walk us through the specific actions you’ve taken so far, we can let you know where you went off track and what you need to change.
NB: You should also take a moment to really re-consider if you need Multisite at all. Managing a multisite network is more technically involved, and many plugins (including backup and restoration plugins) may involve more complicated setups, may not support multisite at all, or may require their paid/premium versions. If you only need a handful of sites, it may be easier to install and maintain multiple instances of regular WordPress, than a single instance of WordPress multisite.
Good luck!