I said "all else equal" for a reason. Bezels aren't solely for decoration. That's where they hide the electronics that drive the display. In recent years, it's been possible to fold the electronics under the display, which makes it thicker. Huawei and others have made different design decisions. It also likely uses a 21nm design process enabling a smaller chip. Plus, it has more total area to work with because it extends out.
Until recently 42mm was considered to be a large watch. 38mm was the traditional men's watch size. My guess is Apple made the 42mm mimic the 38mm (and not the other way around) because it wanted both to look the same and have the same general dimensions. The 42mm gets a significantly bigger battery as a result (one that could last 2 days for many people, but which Apple doesn't advertise). I'd also guess that the 38mm outsells the 42mm, as it's a better size for most women and a significant percentage of men. The reason the 42mm displays more text is that both displays have the same DPI (meaning they are cut from the same panels).
That's what I stated -- Apple had to design the watch based on the 38mm dimensions, and with the 42mm made a decision to maintain the relative bezel dimensions, strictly based on form and NOT function.
Regardless, even if Huawei were to make the same compromises as Apple in terms of limited battery and screen display area, in order to offer a 38mm watch; back to your original point about the comparison between a current round watch having more display area over an Apple Watch being unfair, it's clear from your own follow up that it's just not true.
You're saying Apple made specific choices to reduce the screen size to avoid making the watch thicker, which may or may not be true, and Huawei using a common and traditional round shape gains some extra internal space to spread out the same electronics Apple may be using while able to be thinner and have a larger display. Based on those technological limitations, then how is the comparison unfair? If Apple can't technically offer a display capable of equal area as Huawei, then it's perfectly fair -- if rectangular watches currently limit the amount of display area over round, given the constraints of similar sized cases.
So, if someone wants a watch display larger than what Apple currently offers, their choices are limited -- buy a larger rectangular watch (which Apple doesn't offer yet, and may have a much more limited market), or buy a round watch of the same size.
Maybe one day Apple will have technology to push their display to the edges, without sacrificing thickness and size, and when that day comes, the result will essentially be parity for display area on a rectangular watch with the same height as a round watch diameter. And even then, one could reasonably presume the round watch would benefit from the same technological improvements allowing them to be even thinner and more compact, thus retaining the edge over rectangular. For now the argument is moot and fair. It's one thing to debate theory, but theory doesn't satisfy a person's needs today.
Now a true square edge-to-edge watch would be something else altogether, though I'm not sure how attractive that would be.