Why is this happening, how can I wrap the image correctly around the corner?
Adobe Dimension is a quick and easy 3D toolset, which doesn't really encourage looking under the hood a lot - but from my other 3D experience, I'd say it doesn't allow images to span UV islands, and the areas your're spanning are on differing UV islands.
If you're stuck in this toolset, the answer is a simple one: place create multiple versions of your decal image - one to each island, then maneuver them to overlap correctly.
Alternately, you could make two versions of the decal, one for each area, and manually align them when placing.
Or you could look at other 3D tools - any decent 3D DCC (Digital Content Creation) tool can do what you need and give you control over the UVs and decal placement - but there will be a learning curve and/or a cost to each.
Blender is free and quite powerful (with admittedly a somewhat idiosyncratic workflow) and is a great place to start out these days as the newer UI (as of v2.8) is pretty clean and effective.
I was able to get a little time to experiment - what I found with two of the Adobe-provided startup assets was that the UVing varies, and that some is clearly done using an automated unwrap, and then the procedure amalgamates all the UVs into one master UV map for the whole scene... and doesn't use UDims to separate different UV tiles.
This is a bit... messy... and the point at which what should be appropriately connected UVs are, versus are not, either convergent or connected is pretty much on a model-by-model basis, as far as I can tell.
In this model which has a bag, some tissue in the bag, and a cube box also, the UV's have consistent texel density, but are messily aggregated, and have some strange connectivity - clearly either an automated UV or a less skilled 3D generalist creating the asset:
So the best bet for consistent UVs is pulling in your own 3D models, that you know are properly UV'd - but that then for me begs the question - if you can create and correctly UV such a model, what would be the use-case for Dimensions? In fact, of course, Dimensions is aimed at Graphic Designers with little to no general 3D experience or skill, and for them it's exactly on-point - gives 'em enough power to get moving with, but not enough detail to be overwhelming.
TL;DR - case-by-case, model-by-model, some will allow corner-wrapping better than others, and you'll just have to test. Where it's not working as you need, use the workarounds I've already described.
Hope that helps.