Help making a adder/subtractor on Logisim
When you calculate the two's complement of 1000 you get 1000. The range of possible signed integers with 4 bits is: -8 to 7. 

When selecting the subtract option, the largest positive number in the input which will have its value negated is 7 (0111).

Your circuit is giving the expected (invalid) result since the second input number is not in the acceptable range for the subtraction operation.