Am a little confused on how this works. Have selected: was expecting anything.example.com to be redirected to www.example.com but instead the url just shows the default nginx server page as shown below: What am I missing here?
You created an alias domain example.com with auto subdomain www.example.com. You set up the seo redirect to redirect everything to www.example.com. So this should redirect all bla.example.com to www.example.com Maybe you have not set the DNS entries for "anything.example.com" to the same server that www.example.com resides on, so your rules don't apply.
Check if the subdomain resolves to the correct location (ip). Then check the vhost file of the webserver for your main domain that you created the mentioned aliasdomain for. It should list the aliasdomain and the seo rewrite rules inside.