It looks like you have a configuration problem, but it's impossible to tell whether it's an Alias directive interfering, an incorrect DocumentRoot, or something else. You'll just have to investigate the server configuration.
If /example/html is the document root, then the error message should have read:
The requested URL /home.php was not found on this server.
You could also try a syntax tweak to see if it helps, but it's still just a work-around that only covers up the root problem:
RewriteEngine on RewriteRule ^1$ [b]/h[/b]ome.php [L]