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From a mechanical perspective, a screen around the outside would create a wrinkle rather than a crease when opened, and that wrinkle would be substantial. The phone would need some sliding/rolling mechanism to pull the screen flat. Possibly doable, but finicky and fragile. Especially considering elements like cameras, touch ID, etc.

From an experience perspective, I imagine it's just more satisfying to open it like a book. A screen on the outside would mean the inside is almost empty, just utilities like camera lenses.

That design was explored years ago with earlier foldables. The market consolidated on the two screen design pretty early.

not entirely sure why, but i’d guess there were durability concerns with the screen wrapping around the edge. might have also felt weird to hold. potentially the crease would be worse in unfolded mode as well.

My guess is the reason is, "how much screen would a user be willing to lose to the rear cameras?"