You need to update "RewriteBase" and "RewriteRule" if you want to install WordPress in a directory.
For example, if I want to install WordPress in the "blogs" folder, the ".htaccess" file should look like the following (changes are highlighted).
<IfModule mod_rewrite.c>
RewriteEngine On
RewriteRule .* - [E=HTTP_AUTHORIZATION:%{HTTP:Authorization}]
RewriteBase /blogs/
RewriteRule ^index\.php$ - [L]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteRule . /blogs/index.php [L]
</IfModule>