Fix it by adding this:
The permission of the folder /usr/local/lsws/conf/vhosts was wrong. I have set it to 755 and it works
LOL, I manage to find it just right after I post it
I spend many hours trying to set up password protection on the folder. Failed so many times.
I've created realm
I've created password DB using GUI
with multiple users there
I've created a Context with settings
So all users can access from the DB
I've check permissions on users the DB...