Question about installing multiple WordPresses

I did a lot of reading and I am still a little confused. I have my current website installed in a subdirectory. I now want to make a new subdirectory where I can test and build a highly revamped version, with a new database, new plugins, new theme, etc., keeping everything completely separate. I don’t want to use subdomains or multisite as this simple subdirectory method more than meets my simple requirements.

So, I have a simple question regarding the Softaculous install. I want to do it properly so that a) It doesn’t mess with my current web page and b) it makes redirecting everything later work (I see there are a couple of writeups on which files to move and/or copy to make my test site live without having to move all the files which would work out nice).

So, for the previous install here is an example of what I might have selected in the setup fields of Softaculous:

1) Choose Domain: https://www.example.com
2) In Directory: currentwebsite

In the new install would I simply keep the domain the same (that is what I don’t understand and what worry’s me) and just make a new subdirectory, and each install instance will not interfere with each other and my live website will continue to function, while at the same time I can do testing and run the test website independently, and finally that it would be the proper setup when I go to move/copy files to make the test site live?

Choose Domain: https://www.example.com
In Directory: testingwebsite