The original Bismark myth from the Lore Book is that long ago, Bismark was a white sea whale and all the other whales thought he was an abomination and eventually killed him because of it. The gods took pity on him and brought him back to life. Bismark then went and created the first clouds, specifically the Sea of Clouds, so he could have someplace to be where no one hated him. This includes raising up islands into the sky to create a haven for other persecuted people to go to. The myth is rather important as the Vanu Vanu reference it as the reason they know Primal Bismark isn't the real Bismark, so they're fine with helping the WoL kill him. The real Bismark would never go around eating the islands he himself created or go around persecuting people himself.

If it wasn't for the name, I'd think that 1st Shard Bismark and Source Bismark have nothing to do with each other. Also... given what the fae on the 1st Shard are (aether of dead people that's stuck around), Bismark is probably something similar. He's just not created out of the aether of a kid who died (pixie) or the aether of someone who drowned (fauth).