"This one will have sealing problems, and efficiency is likely to be poor due to high surface-to-volume ratio, but keep trying."
If the mating surface of the inner to outer rotors was sperical rather than cylindrical, the sealing could be performed by a "piston ring" at the top of each cylinder.
I am not seeing the problem of high surface area to volume ratio. For an engine of this B/S ratio the chamber shape is near optimal. Certainly better than any poppet valve engine. Of course a lower B/S ratio would reduce A/V even further and there do appear to be B/S limitations inherent to the mechanism (and reduced packaging efficiency at lower B/S ratios)
Engineering is the art of creating things you need, from things you can get.