@rolf2,

The two should be completely separate from each other. I would recommend going back to an officially supported wiring configuration so that variables are removed, such as your neutral.

At what point are you presented with Internet not Available? 

When your phone connects to the setup network of the switch, you will be given this warning since the switch's wi-fi cannot provide a connection to the internet. During setup, your phone will switch between your home Wi-Fi and your plug Wi-Fi to communicate the settings needed for the switch to connect directly to the Wi-Fi.

Also, make sure prior to setup that your phone is connected to the network that you intend to add the switch to.

Lastly, after a set period of time (15min), your switch will stop broadcasting its setup Wi-Fi - you will need to either reboot or reset the switch to make the setup Wi-Fi reappear.

You can learn more in the User Guide for your device: HS220 Downloads

  @rolf2,

I believe that the lack of a neutral will prevent the switch from successfully booting into the setup process. I believe that the indicator will flash red when in an invalid configuration.

The function of the switches really cannot be used to determine the type of wire connected, if you are unsure of what wires are what, I would recommend using a voltage tester or contacting an electrician. Using a neutral-requiring device without one, or connecting switch wires in the box can always be dangerous, particularly if you are not sure what each wire is.