Because the multi-scene story films of Georges Méliès hadn't come around yet and wouldn't until 1899, to try and tell the story of Rip van Winkle in a single film was still quite unheard of. So instead of making one film, W. K. L. Dickson made eight, each one showing an event from the story--and when you read the title of every one, you'll probably know what happens in each film. "Exit of Rip and the Dwarf" is the third in the series, following "Rip Meeting the Dwarf" and preceding "Rip Leaving Sleepy Hollow." Since both "Rip Meeting the Dwarf" and this film feature the exact same location, it's hard to understand why they couldn't just combine both segments together to make a single film. Not all films by 1896 had to be twenty seconds long; the Lumière Brothers in France were shooting movies twice that length with their Cinematograph. Because of lacking in knowledge in this technical aspect, I can only guess that Biograph's cameras were very primitive yet and couldn't hold as much film, since even the quality is lower than the actualities of the Lumières.
Like I've said multiple times before, each clip can't really be judged individually because each one is a very small fraction of the entire story. You have to watch them together, take out the title cards at the beginning of each segment and then get what they were going for. Even then most people nowadays won't take up much interest in any of it anyway and it's only really of interest for people like me, interested in the early years of motion pictures.
