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Can we trigger a workflow of a child list as soon as a new Item is added in a list by a master workflow using "create list item" action?
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You could, but there is also a "Start Workflow" action. Why not use that?
I assume new item is created in that child list.
then configure workflow on child list to run automatically on item creation.
once the master workflow creates a new item, workflow will automatically be fired by sharepoint.
I'd say it should start just the same way.
does it start if you create child item manually?
Yes!!
sadly, it seems this is really not implemented on O365