mod_rewrite, can't rewrite existing file - .htaccess

Question

I'm trying to pass all images in a directory to watermark.php using mod_rewrite in .htaccess.
RewriteEngine On
RewriteCond %{REQUEST_FILENAME} -f
RewriteRule \.jpg$ /watermark.php?path=%{REQUEST_FILENAME} [L]
It works fine on local machine, but on my online production server (shared hosting) all image files are served without rewriting.
mod_rewrite is enabled online, but it ignores the rule if file exists.
What could be wrong?
UPDATE
Here's my full setup: there's a domain with a subdomain in a subfolder of main domain's document_root.
public_html (example.com DOCUMENT_ROOT)/
img (img.example.com DOCUMENT_ROOT)/
.htaccess in public_html folder:
<FilesMatch "\.(inc\.php|log)$">
Deny from all
</FilesMatch>
Options -Indexes +FollowSymLinks
php_value short_open_tag 0
php_value auto_prepend_file /home/username/public_html/bootstrap.inc.php
RewriteEngine On
RewriteCond %{HTTP_HOST} ^img\. [NC]
RewriteRule .* - [L]
RewriteCond %{HTTP_HOST} ^www\.(.+) [NC]
RewriteRule ^(.*)$ http://%1/$1 [R=301,L]
RewriteCond %{HTTP_HOST} ^example\. [NC]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteRule ^(.*)$ shop/$1 [L]
.htaccess in img folder:
<FilesMatch "\.(inc|log)$">
Deny from all
</FilesMatch>
Options -Indexes +FollowSymLinks
php_value short_open_tag 0
php_value auto_prepend_file none
RewriteEngine On
RewriteCond %{REQUEST_FILENAME} -f
RewriteRule \.jpg$ /watermark.php?path=%{REQUEST_FILENAME} [L]
The problem is that existing images in img folder are not rewrited. Apache just serve them as is. But if, for example, I request non-existing file the rule works and echo $_GET['path'] prints the full filepath to non-existing file.

Answer 1

Here's what you can use:
RewriteEngine On
RewriteRule ^(media|image|images)(/?)(.*)$ - [F]
RewriteRule ^([a-z0-9\-_\.]+)\.(jpg|jpeg|png|gif)$ /watermark.php?path=%{REQUEST_URI} [L]
The first RewriteRule is set to make sure people don't go to that folder - it gives a 403 permission denied (this is optional)
The second one will redirect any images that match letters, numbers, dash, underscore and dot with the extension: jpg, jpeg, png and gif to your watermark.php file. eg:
http://www.domain.com/logo.jpg => path = /logo.jpg
UPDATE:
Since the rule is in a different folder and the root directory of IMG is /home/username/public_html/img/ the watermark.php file does not exists. Either copy the file you need (watermark.php and its libraries) to the IMG folder or create symblink.
cd /home/username/public_html/img/
ln -s ../watermark.php (and other library files as well)

Answer 2

htaccess change :
Options -Indexes +FollowSymLinks
by
Options -Indexes +FollowSymLinks -MultiViews
This behaviour steel exists on Apache 2.4..