Nginx + Laravel inside /api folder: File not found

I have the following config for Angular (JS) app, where the laravel (PHP) API for the same app is inside the 'api' folder:

server {
    listen 80;
    server_name example.com www.example.com; 
    root /var/www/html/mydomain.com; #path to static directory
    index index.html index.htm index.php;
    charset utf-8;
    location / {
            try_files $uri $uri/ /index.php?$args;
        }

    location /api {
            alias /var/www/html/example.com/api/public;
            try_files $uri $uri/ @laravelapi;
            location ~ \.php$ {
                include fastcgi_params;
                fastcgi_pass   127.0.0.1:9072;  #set port for php-fpm to listen on
                fastcgi_index index.php;
                fastcgi_param SCRIPT_FILENAME $realpath_root$fastcgi_script_name;
                
        }
    }
location @laravelapi {
            rewrite /api/(.*)?$ /api/index.php?$is_args$args last;
    }
location = /favicon.ico { access_log off; log_not_found off; }
location = /robots.txt  { access_log off; log_not_found off; }
error_page 404 /index.php;
location ~ /\.(?!well-known).* {
        deny all;
    }
}

the web (JS) works great, but all APi calls such as: http://www.example.com/api/public/pokemons fail with "File not found" message. Checking the error_log file of nginx:

2022/03/18 12:08:47 [error] 8028#8028: *26642 FastCGI sent in stderr: "Primary script unknown" while reading response header from upstream, client: 198.41.242.154, server: example.com, /127.0.0.1:9072", host: "www.example.com"

Not sure why there is an issue, I have other websites running on the same PHP FPM config and they work just fine.

Any idea what I'm missing?