I had a similar issue with another client, entering something like projects/project1 would error as the / would fail validation.
After failing to find an override or filter, instead I found a loophole. If you make projectsproject1, then afterwards edit the site so its url is projects/project1 and save, update the homeurl etc, it works! You may need to make modifications to htaccess etc however to prevent attachments failing to load, but that should be less of an issue now that 3.5 skips ms-files.php
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