This won't answer the reason why it worked-sort-of, nor exactly how you're wired - I'll leave that to the real electricians - but, I don't think you can use the HS200.
The HS200 requires a neutral for itself. Because it's a smart switch, and not just an expensive detachable piece of metal, it actually consumes current; so it can't just have a hot wire passing through it.
TPLink's page on installing the switch covers this in some (poorly written) detail.
If the black-wrapped wires (B1,W1) were solely going to the breaker, and the yellow-wrapped wires (B2,W2,copper) were solely going to the lights, then you could make it work - you'd have your neutral. But, that doesn't seem to be what you have, based on what you wrote - if that were the case then you'd not be able to turn on only the one light and not the others.
The yellow wrapped wire is irrelevant here - it is relevant to the lights it feeds, of course, but from the point of view of powering your switch, you need three wires plus ground: two wires that go back to the circuit breaker (one each, hot and neutral), and a third (hot) wire that goes to the light (with the light also having one go back to the breaker's neutral).
Consult an electrician, who can install a neutral wire for you to the switch, and fix the wiring of the current switches as needed.
You also could consider a smart switch that doesn't require a neutral, though I would bring an electrician in to make sure your wiring isn't wrong in other ways; but see for example this article about smart switches which do not require neutral, which also does have a nice bit explaining what your setup probably is like (disregarding the yellow-wrapped wires, which seems like they're just piggybacking on the black-wrapped ones).