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Variable being unset when I add another location. - 10 years ago

I'm running into some inexplicable behavior with this config. I set a subdomain variable to a matching group from my server_name regex, and use it later in some rewrites and try_files. However, when I added the location block for static files: location ~* /.*/.*\.(jpg|jpeg|gif|css|png|js|ico|xml)$ The subdomain gets set to an empty string. Can somebody explain to me what is causing this? Config