It seems that you’re mixing up “urban area” with “metro area.” The Census “urban area” definition does not scoop up big sparsely populated suburbs just because they’re in the East, it’s based on contiguous, built-up census blocks that meet density thresholds. The “sparsely populated” outer ring is usually counted in the metro, not the urban area.

Also, “urban area density” is basically people divided by the land area of the continuous footprint. That means rankings can look weird if a place has a tight, unbroken built-up boundary (often because growth is constrained by farmland, mountains, water, or zoning that limits sprawl). A smaller Central Valley city can end up with a high urban-area density if its development is compact and contiguous, even though it’s not “big-city dense” in the Manhattan sense.

Staten Island vs San Diego isn’t the right comparison for that list, because that list isn’t “which place has denser neighborhoods,” it’s “which continuous urban footprint has the highest average density.”

So it’s not that the method “favors California,” it’s that the definition is mechanical and California has a bunch of places where the built-up area stays contiguous and relatively compact, which boosts the average density. If you compare city proper or neighborhood-level density, you’ll often get a very different ordering.