Initial MS documentation on this topic can be found here. You don't need a sub domain nor are they even supported. You can keep and should it all in one (flat) domain. Also, just to call it out, a domain functional level of 2012 R2 or higher is required as well as a forest functional level of 2012 R2 or greater. You can use the following as an alternative to what MS is suggesting but you may run issues with naming and/or certificates:

• axd365ffoUAT.contoso.com for AOS machines (for your UAT instance)
• sfd365ffoUAT.contoso.com for the Service Fabric cluster (for your UAT instance)
• ax.test.detroit.contoso.com for AOSs if instances are location based and you will have a zone for each instance. A full set of environments may be Gold, UAT, Mig (Migration) and Demo so they may look like the following:
  • ax.detroit.gold.contoso.com for location Detroit for environment instance GOLD
  • ax.detroit.UAT.contoso.com for location Detroit for environment instance UAT
  • and so on

However, if you don't have any specific reason not to follow MSFT recommendations, please follow MSFT recommendations. The only thing to keep in mind is that the document from MSFT covers how to configure your first instance. You will be creating more than 1 so take the time right now to plan out all of your environments with their DNS zones. 

If you will have 1 geographic location for all instances, I suggest this format:

ax.(instance name).d365.contoso.com - ie; ax.uat.d365.contoso.com

If you will have more than 1 geographic location for all instance, I suggest this format

ax.(location).(instance name).d365.contoso.com - ie; ax.detroit.uat.d365.contoso.com

Suggestions

Consistency and planning is key so plan it all out right now. You can use this planning tool to help. Plan out your entire implementation now, confirm the plan and stick to it.