What's the difference between no sé español and no hablo español? It seems to be the case that people don't say the former, however we can say "I don't know Spanish" in English. Moreover it appears that it's okay to say no sé español bien, so why is it strange to say no sé español? What's meaning?
I'd say it's a matter of preference.
no sé español or no hablo español are widely used in order for you to state that you don't have Spanish knowledge.
Similarly, in my country, many people often say no sé inglés or no hablo inglés.
A far-fetched example could be something like sé español, pero no lo hablo, this implies that the speaker has knowledge about Spanish language but it doesn't necessarily imply that this person has the other main abilities. For instance, no hablo español, pero puedo leerlo.
In the case no sé español, yields the possibility that the speaker won't be able to use anything about the Spanish language.