Why is my sub-category template showing the wrong posts

Remove query_posts and add a pre_get_posts action to your functions.php file to modify sort order:

function wpd_category_sort_order( $query ) {
    if ( !is_admin() && $query->is_category() && $query->is_main_query() ) {
        $query->set( 'order', 'ASC' );
    }
}
add_action( 'pre_get_posts', 'wpd_category_sort_order' );