It's because it's a compound of two smaller compounds, not that they started just selecting individual kanji one at a time.
外出 - going out
禁止 - prohibition
禁止 is a common word, and while yes, anyone who looked at 外出禁 would probably be able to discern the meaning of it, that's not how 外出禁止 was formed.
I suppose you might be wonder why do we need 止 in the word 禁止, why can't it just be 禁. That is a word on its own after all. I think that it's just that there is a tendency for very short onyomi words to be supplanted by longer onyomi words that disambiguate things. There are many things pronounced きん. There are far fewer pronounced きんし.
Why is 止 also here?
As a grounding, one should not be able to go out, which is prohibited, in fact. This can be resolved with the first three Kanjis. I understand that 止 can also give meaning to the word but I think that without it would be also fine.