Hi @iprince4v
did you solve the issue? I bumped into your post since I have the same issue!
multistore with friendly url ON: the virtual store doesn't work properly (no category pages, no cart or account working);
multistore with friendly url OFF: both of stores work fine!
Hope to read back from you and... with a positive reply! 
(testing on PS 1.7.8.X - PHP 7.4)