What does 'Not percipient of form internally' in Salayatana Sutta mean?

The Eight Liberations (Aṭṭha-Vimokkha)

1. Kāyagatāsati-RūpaJāna (rūpī) Attainer perceives own kāya (rūpa) to attain jhāna.

2. Kāyagatāsati-RūpaJāna Attainer perceives other's kāya, rūpa, to attain jhāna. << This is your answer.

   Both are body's organ, such as bloody&shitty colon, so they are not beautiful.

3. ColorKasiṇa-RūpaJāna Attainer perceives the color. it is the only color, so it's beautiful.

4. - 7. are ArūpaJāna Attainer, 8. is the champion of all jhānā because jhāna try to blind of Rūpa&Arūpa, and saññāvedayitanirodhasamāpatti can do it completely.

It comes with The Eight Bases for Transcendence, Aṭṭha-Abhibhāyatana, in MN Mahāsakuludāyisuttaṃ:

Abhibhāyatana (Pali: the 8 'stages of mastery'), are powers to be obtained by means of the kasina-exercises see: kasina. In the Com. to M. 77, where āyatana is explained by 'means' kārana it is said: The abhibhāyatana through their counteracting may master and suppress their adverse opposite states, and by means of higher knowledge they may master the objects of mind. They are means for transcending the sense-sphere.

The stereotype text often met with in the Suttas e.g. D. 11, 33; M. 77; A. VIII, 65; X, 29 is as follows:

1. Perceiving blue..., red..., yellow..., white forms in or on one's own body, one sees as if external small forms (e.g.: tooth) , beautiful or ugly; and in mastering these one understands: 'I know, I understand.' This is the first stage of mastery.
2. Perceiving forms on one's own body, one sees these forms as if external, yet now also large ones (e.g.: leg-bone=femur). This is the second stage of mastery.
3. Not perceiving forms on one's own body, one sees forms externally, small ones (e.g.: pollen inside flower). This is the third stage of mastery.
4. Not perceiving forms on one's own body, one sees forms externally, large ones (e.g.: planets, galaxies). This is the fourth stage of mastery.
5. Not perceiving forms on one's own body, one sees forms externally, blue (cobalt, yves-klein, flax, clear & pure) forms, forms of blue color, blue appearance, blue lustre, and mastering these one understands: 'I know, I understand. This is the fifth stage of mastery. 6-8: The same is repeated with yellow, red and white forms. As preparatory kasina-object for the 1st and 2nd exercise one should choose on one's own body a small or a large spot, beautiful or ugly, and thereon one should focus one's full undivided concentration, so that this object after a while in mind is visualized as a mental reflex or image nimitta and, as if it were, as something external. Such an exercise, though appearing quite mechanical, if properly carried out will bring about a high degree of mental concentration and entrance into the 4 absorptions jhāna. In the 3rd and 4th exercises the Bhikkhu by an external kasina-object gains the mental reflexes and absorption see: As objects of the remaining exercises, perfectly clear and radiant colors should be chosen, flowers, cloth, etc.

A kasina-object of small size is said to be suitable for a mentally unsteady nature, one of a large size for a dull nature, a beautiful object for an angry nature, an ugly one for a lustful nature.

In Vis.M V it is said: By means of the earth-kasina one succeeds in reaching the stage of mastery with regard to small and large objects. By means of the blue-kasina one succeeds in causing blue forms to appear, in producing darkness, in reaching the stage of mastery with regard to beautiful and ugly colours, in reaching 'deliverance through the beautiful', etc. cf. vimokkha II, 3. The same is also said with regard to the other colour kasinas.

Your quote from MN137 appears in several suttas. It is significant:

ajjhattaṃ arūpasaññī bahiddhā rūpāni passati

The word ajjhattaṃ has a connontation of self, of identity view. In other words, there is a personal relationship to the seen, the heard, etc. In this way, it is very much like "My Precious" from the Lord of the Rings. There is a sense of possession in the internal form. There is the taint of identity.

The word rūpāni has a connotation of non-identity, of simple recognition of form, that which is seen, heard, etc., but without personal identification. One sees a stranger's wedding ring, one sees the wealth embodied in the ring, one sees the proclamation of wealth in a ring, one sees the promises bound into the ring, one sees the hope bound into the ring, one sees the suffering bound into the ring.

The liberations are an important progression of awareness. Suffering, one perceives the world in terms of craving. With each step of liberation, one sees beyond oneself. One sees more of the world as it is and relinquishes identity view.

Seeing things externally, just see them for what they are, not for what they are to you.