Why is this double switch controlling both light circuits from both switches?
You disregarded a feature these switches have, where one side of both switches are wired together.   They can be separated by breaking a tab, but you didn't.  



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This side is intended to be the "common" side, so you could accomplish the left side of your diagram with one wire. However you placed it on the right side,  where it shorts the output of both switches.  

Just rewire to suit, or break off the tab.