Wrong physical path when using URL Rewrite in IIS

I have a simple ASP website running on IIS on port 81 on a Windows 11 PC with the latest ASP.NET Core Runtime 8.0.14 hosting bundle installed and the website is compiled for .NET 8.

Accessing the website through localhost:81 works just fine.

I have installed URL Rewrite and Application Request Routing (and enabled the proxy) and setup a simple rule to map any incoming requests to localhost/mysite to localhost:81:

<?xml version="1.0" encoding="utf-8"?>
<configuration>
  <system.webServer>
    <rewrite>
      <rules>
        <rule name="ReverseProxyInboundRule" stopProcessing="true">
          <match url="^mysite/(.*)$" />
          <action type="Rewrite" url="http://localhost:81/{R:1}" />
        </rule>
      </rules>
    </rewrite>
  </system.webServer>
</configuration>

When accessing the website through localhost/mysite I get a 404:

I have used this URL Rewrite rule before and it normally works but the error message says that the Physical Path is C:\inetpub\wwwroot\mysite\ but the real physical path is C:\Websites\mysite.

I have tried setting up Failed Request Tracing but I don't get any output in C:\inetpub\logs\FailedReqLogFiles:

<tracing>
    <traceFailedRequests>
        <add path="*">
            <traceAreas>
                <add provider="ASP" verbosity="Verbose" />
                <add provider="ISAPI Extension" verbosity="Verbose" />
                <add provider="WWW Server" areas="Authentication,Security,Filter,StaticFile,CGI,Compression,Cache,RequestNotifications,Module,FastCGI,WebSocket" verbosity="Verbose" />
            </traceAreas>
            <failureDefinitions statusCodes="100-999" />
        </add>
    </traceFailedRequests>
</tracing>

If I should be so lucky that someone with deeper knowledge of why this happens should read this post I will definitely welcome some guiding!

Try to set the url rewrite rule pattern as shown below:

^mysite/?(.*)

OR

^mysite(.*)

and make sure you have added the rule to the iis default website