May a Trivial Principal Bundle Admit a Non-Trivial Reduction of the Structure Group?

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Let $\pi\colon P \to M$ be a principal bundle with structure group $G$ with respect to the Lie group right action $\triangleleft\colon P \times G \to P$.

To my knowledge, a reduction of the structure group of $\pi\colon P \to M$ to a Lie subgroup $\hat G \subset G$ is a subbundle $\hat \pi\colon \hat P \to M$ that is a principal bundle with respect to the restriction of $\triangleleft$ to $\hat P \times \hat G$.

For some reason I intuitionally suspected that the triviality of the principal bundle descends to its reductions of the structure group.

However, I now think that I found a counter-example and would like to confirm my suspicion:

Consider the torus $\mathbb T^2$ as total space of a trivial $U(1)$-principal bundle over $S^1$. We can define the Lie group action $\triangleleft\colon \mathbb T^2 \times U(1) \to \mathbb T^2$ to map a point $\begin{pmatrix}(1+r \sin(\psi)) \cos(\phi) \\ (1+r \sin(\psi)) \sin(\phi) \\ r \cos(\psi)\end{pmatrix}$ under the action of $e^{i \varphi}$ to a point given by $\begin{pmatrix}(1+r \sin(\psi+\varphi)) \cos(\phi) \\ (1+r \sin(\psi+\varphi)) \sin(\phi) \\ r \cos(\psi+\varphi)\end{pmatrix}$.

We then can choose a non-trivial reduction of the structure group to $\mathbb Z_2$ according to the red submanifold in the sketch below:

Torus as trivial U(1)-principal bundle over with a non-trivial reduction of the structure group (red)

Questions

  1. Does my example work?
  2. If so, are there criteria for when the triviality of the principal bundle descends to its reductions of the structure group? (Other than the base space being contractible.)
  3. I was aware that there are non-trivial vector subbundles of trivial vector bundles. I however thought this question was unrelated to the case of principal bundles. Is it valid that the fact that there exist non-trivial vector subbundles of trivial vector bundles implies that there also exist non-trivial principal subbundles of trivial principal bundles? (Showing that the frame bundle of the non-trivial vector subbundle is a principal subbundle of the framebundle of the trivial vector bundle that we started with...)