You did use too much. It does not need to be perfectly applied to look great when the soap is done. In fact if you strive for perfection, you'll probably muff the pencil line by adding too much colorant.
I would have cut your soap with the loaf lying on its side to reduce the smearing.
I use a small, fine mesh strainer to spread the colorant. Doriette's tea strainer is perfect.
I don't shake the strainer from side to side -- that's much too forceful. Instead I gently tap the side of the strainer with my fingertips as I move the strainer over the soap. Yes, some of the colorant gets onto the sides of the mold. If that really bothers you, cover the mold sides with waxed paper (then remove the wax paper after your done.) Or do what I do -- just work carefully and clean up when done as best you can.
I want a very thin layer of colorant on the soap. I want to see the powder become wetted completely through in a minute or two at most. If it doesn't look wet, there is a good chance the soap layers will not stick. If the colorant stays dry looking or seems overly thick, I will scratch the powder into the soap batter using a toothpick or fork with the goal of lightly mixing it into the top 1/8" (2-3 mm) of batter. This will disrupt the pencil line some, but it will still look okay.
I'd rather have a not quite perfect pencil line than a soap that comes unstuck.