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you're selecting a library playlist into the main playlist editor. however, there's no tracking of what's in the main playlist editor back to the library playlist. so any changes you make in the main playlist editor will not go back to the selected library playlist unless you make it do so.
also in the way you've got things setup, you cannot actually see what the contents of the library playlist are which also allows you to edit that playlist (if needed manually pulling in the contents of what's currently in the main playlist editor).
if you click and move the divider which is inline with the right-edge of the 'library' button then you'll see a whole lot more and also what's in the actual library playlist being selected and the options to be able to edit it.
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