Yes, the screen sizes are diagonals.
Back in 2016, when all phones had 16:9 screens, this was a reliable way of judging the size of the screen. These days it isn't, because different phones have different aspect ratios and so the same diagonal can mean different things.
Given that most Western (Roman alphabet" scripts are read from left to right, it always seemed strange to me that these phones (Samsung particularly) would continue to make narrower and taller phones, when the true real estate of a mobile device desktop, (For reading) is width and not height, and how many characters you can read in a single line.
What do you think?
I don't want a wide phone because it's awkward to hold and needs 2 hands to operate it. The point of a phone is portability: I have other devices with larger screens if that's what I need.
I think you'll find that they regard watching video rather than reading as the driver for the screen choice, and you use the phone in landscape mode for that anyway. But I also think that part of the drive to "taller" is just because "all screen" is considered more modern/sexy than having bezels, even though ergonomically a bottom bezel is better: it's easier to hold a phone and operate buttons or gestures that start at the bottom of the screen if you don't have to stretch your thumb down to the very bottom of the device. One reason I use buttons rather than gestures on my s21 is that the home/recents gestures are more awkward unless you are using 2 hands, because you have to balance a tall device in your hand while reaching a thumb right to the bottom.
Also taller means larger screen diagonal, which is good for marketing. Because marketing by numbers, even if they mean nothing for usability or are actually counter-productive (high MP counts on small sensors were common in 2014) is a long-standing feature of the phone market. Though I notice that Samsung have made the s22 series shorter than the s21, so maybe they are realising the limit to this approach (or just figure they can reduce production costs a little)?
To be honest I can read more text on a screen that's taller but the same width than one that's shorter, so it doesn't bother me. It's when the phone becomes too long to fit my pocket well, or too wide for me to use one-handed, that I have a problem. The vast majority of phones these days suffer from that problem, but that's also true of a 5.5" phone with a 16:9 aspect ratio (which we used to call a "phablet", but these days most phones are that width but taller).