custom_url_rewrite_outbound() function in settings.php is rewriting subdomains incorrectly.

I just installed the Subdomain module (version 6.x-1.7) onto my site. I am running Drupal 6.15.

In README.txt, it mentions that I should not have to update settings.php for this version of the Subdomain module. However, when I visit my "URL Aliases -> Subdomain Settings", I see that everything is set up and working correctly except the outbound URL writing function.

The full version of the message that I get is:

Drupal API: url('~subdomain-test/subdomain/test') returned 'https://subdomain-test.[mysite].com/subdomain/test' but should have returned 'http://subdomain-test.[mysite].com/subdomain/test'

The custom_url_rewrite_outbound() function in settings.php is rewriting subdomains incorrectly. Did you patch settings.php? See readme.txt for instructions.

Has anyone else faced this issue? If so, how did you solve it?