This is surprising. Are you sure of that? I've always understood the first number to be the tire width and that has matched many tires I've used over the years, from Maxxis, Panaracer, Schwalbe, Conti, Vittoria, and others. This is also true according to Michelin:

ETRTO (EUROPEAN TIRE AND RIM TECHNICAL ORGANIZATION) SIZES are given for all tires. In this example: 32 x 590, the first number (32) is the tire width in millimeters. The second number (590) is the tire diameter in millimeters. This chart shows the conversions for all the sizes.

Schwalbe agrees:

The ETRTO size specification 37-622 indicates the width of 37 mm and the tire inner diameter of 622 mm. This dimension is clear and allows a precise classification of the rim size.

And on the traditional inch marking:

The inch marking (e.g. 28 x 1.40) states the approximate outer diameter (28 inches) and the tire width (1.40 inches).

Even if you go by the traditional designation of 20 x 1 3/8 on the CST, the width should be about 35mm (1 3/8" ~= 35mm).

Of course any of the width dimensions are approximate depending on inflation and exact tire model but they've always matched within a couple of mm in my experience. 7mm differences is shocking to me.

To my understanding the diameter is bead diameter, not the outer tire diameter, which matches the rim. And then for width-to-rim compatibility, there are ranges where a range of ETRTO widths fits a range of rim widths, like this.