Jellyfin's strategy for streaming blu-ray disc folders is to use ffmpeg to concatenate (and usually transcode) them to disc, then stream the result. It doesn't work very well - frequently, the concatenation process is sitting there running long after the client has disconnected. And the devs seem to break it entirely every second release or so, just failing to recognize the BDMV as a playable movie at all.
Please don’t take this as criticism of your setup, but why are you trying to stream Blu-ray Disc folders at all? Why not transcode the files?
Secondly, a BDMV can't be turned into a single correct linear representation - for example, the Star Trek TOS discs have the ability to toggle back and forth between original and CG-remastered graphics seamlessly. As another example, I have stereoscopic 3D blu-rays; should the transcode be the left eye view, or side-by-side 3D with an ultrawide file?
Finally, transcoding necessarily sacrifices quality. Remuxing wouldn't, but Jellyfin usually refuses to stream remuxed containers and insists on transcoding to attach subtitles (their javascript web player and even app don't seem to handle the subs correctly?).
To sum up, turning a disc folder into a single file requires losing content.