Here’s an example - let’s say the domain web.example.com is on the PSL.
This setup allows you to host your customer’s websites on subdomains, such as alex.web.example.com and bobby.web.example.com while making sure they cannot set cookies on the .web.example.com or .example.com domain. Only their respective subdomains.
With this setup you cannot add web.example.com or example.com as a domain in Cloudflare.
You could add alex.web.example.com, but that does not help you manage DNS config for web.example.com or example.com.
The other option is the Enterprise plan, which seems like an overkill if you’re only looking to manage the DNS configuration.