Ah, I see. The "white" is actually bright green washing out the sensor a bit.
As well as the critical rays, add a few more to the schematic diagram between them. They should go up to the water surface and come back down, and if you space them fairly evenly where they are emitted you will find that they come down further and further apart. That tells you that the energy is more and more spread out, so the light gets dimmer and dimmer the further out you go.
You are correct that (in principle) the intensity never falls to zero. (In practice the petri dish walls mess this up.) However, all detectors have a minimum detection value. IIRC, for your eye it's about 1% of the brightness of the brightest thing you can see - anything below that is black as far as you are concerned, whatever theory has to say.
So if you take a radial section from the center of your photo, you're looking at the sum of these three graphs:
View attachment 336508
The red line is, as you said, direct illumination from the laser and is concentrated in the central spot. The green line is illumination reflected from the upper surface and has a sharp-at-the-left peak that decays away to the right without ever falling to zero. The blue line is the same from the lower surface. You therefore see a dark
er band between the peak of the green and blue lines.
I would strongly recommend at least sketching the ray diagram I described in my second paragraph.