connecting lipo batter to raspberry pi
If you think about how those wires are connected inside the battery pack, you will soon realize that when you connected all 3 wires together, you shorted out some of the cells inside the pack.  You are right: this makes smoke.

Use the ground wire for ground and choose only the single hot wire that goes to the top cell.  You will measure somewhere around 11.8V between that wire and the ground wire.

FWIW - you should charge your pack before you do anything else with it.  Your charger will make sure that all the cells are balanced after the abuse you gave them.

Edit: Ignacio Vazquez-Abrams made the point that I forgot to make: you should consider using a switch-mode buck converter.  You will be wasting more than half the available energy from your battery pack as heat if you stick with a linear regulator.