Subdomains show Cloudflare error 1001

Hi,

I've setup our SaaS company's website behind cloudflare and the (@) and (www) DNS records are successfully proxied.

We host a bunch of customer websites under custom domains (example.com OR sub.example.com) as well as on our own subdomains (X.niceboard.co), which use our wildcard DNS record (*).

Currently, our wildcard DNS record is DNS only but when I set it to be "proxied", it seemed to work initially, then the sites displayed a Cloudflare error 1001.

I don't understand why this is happening given that the custom domains point directly to our server IP, and therefore shouldn't even be going through Cloudflare? Any ideas? Our SSL mode is on "Full (strict)"
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