;zend_extension = /var/www/ioncube/ioncube_loader_lin_5.2.so

ionCube is not enabled, there's a ";" in-front of it which turns off features. Please remove then ";".

As you can see, the loaders are located on the root of both folders (/var/www/dev1 and /var/www/html).

Those are 2 different web-roots. You need ionCube configured in PHP.ini for both.

are you positive about IC being the issue?

Yes, again navigate to backend of your dev site and review PHP Information and you can see that IonCube is not properly loaded. This will cause the check done inside the cbsubs bot to fail resulting any CBSubs Content in not functioning.

It would be 1 thing if you were accessing your site at www.example.com/dev/index.php, but you're accessing at dev.example.com/index.php (one is a new domain and the other isn't). Those are 2 entirely different URL structures. You need to setup ionCube for BOTH domains. Generally this is just copying the PHP.ini to the sub-domains Joomla root (and root/administrator of course).

The ionCube library maybe working and translating the encrypted code, but PHP is not SEEING that ionCube is there. Thus function checks within PHP will fail to find ionCube.

Yes, you need to have ionCube initiated and defined in PHP.ini (if this is the method your host requires). It also needs to be within your Joomla root and root/administrator. I'm not sure what more to say. If ionCube is not found in PHP Information (Backend > Help > System Info > PHP Information) then PHP can't see it.

If you're confident it is working as intended then you're welcome to edit the cbsubsbot which is no longer encoded as of 1.1.2 and remove the ionCube check.