I've always found the map of historic Berlin, with its large island trapped into a tight circle fortifications, rather puzzling. Don't ask me why. But once you understand that Friedrichswerder--the westernmost area within the walls--was a later extension of the city and not part of the original foundational core, everything begins to make sense.
A mid-17th century map of Berlin shows what the foundational core of the city was: Berlin proper to the east and the more elongated area know as Cölln to the west. This roughly circular agglomeration is bisected by the Spree River and surrounded by narrow canals. Over time, the western canal--originally a marshy area--will become what is now known as the Spreekanal. In the map you can even see an earlier incarnation of the Berliner Staadtschloss on the north (left on the map) area of Cölln complete with its Lustgarten and, if I'm not mistaken, the beginning of what would eventually become Unter den Linden, at the time little more than a tree-lined road connecting the palace with the Tiergarten to the west.
Friedrichswerder (1660s) would come later, the first of a series new city extensions to the west of the foundational core, not unlike Dorotheenstadt (1670s, originally called Neuestadt) and Friedrichstadt (1690s,) except that Friedrichwerden was established just in time to be encircled by the defensive walls of the mid 17th century.