I always thought that psychosis (even if in a depressive state) would lead to a diagnosis of bipolar 1.

Yes, suicide is obviously a major risk for all of us - but everyone with bp1 or bp2 can be loaded up with major depressions. So I wouldn't consider the depressed suicide risk to be a distinguishing factor.

Looking then at the more distinctive difference - mania vs hypomania... mania is more damaging. That's not saying that hypomania can't be damaging, it sure can! But Mania definitely has a larger chance of royally messing up someone's life. Hence why I consider bp2 to be more "mild".

Do I like the term mild? No, but it does sound nicer than "less severe" to me, so I opt to use it when I am describing myself and my experience. Personally, I find myself having to completely describe what bipolar is and the differences between what people stereotypically think, vs what I experience. Going "it's more mild than that" is an easy way for me to describe it. ((Then again - as it's a spectrum, I can also say that my episodes are more mild than what most people tend to report, even for bp2. My hypomania's are fairly tame, and over the past decade I've developed some pretty good coping/management skills for my depressions... lucky me!))