Pattern with loop increase and immediate decrease?

Hiya, I have a beginner lace scarf pattern that makes no sense to me even though I’m not a complete beginner. Are the instructions incorrect? Would appreciate any help!

Row 3 (Inc) Sl 1 wyib, *insert RH needle between 2nd and 3rd sts on LH needle, yo and draw through a long loop, yo, k2tog tbl, yo; rep from * to last st,
k1—538 sts.

Row 4 (Dec) Sl 1 wyib, *p2tog; rep from * to last st,
k1—270 sts rem.

Hello. What’s the name of your pattern? Is this a straight edge, ie a rectangle, rather than being shaped?
I read this as slip 1 with yarn in back ( to give a smooth selvage edge).
Then put the needle between the 2nd and third stitch on left needle, wrap the right needle and pull it through - a similar manoeuvre to the cable cast on. The first and second stitches are still on the left needle. Now, yo, then knit stitches 1 and 2 tog tbl, and yo again. Therefore, for the first two stitches, you end up with 4 stitches ( the long loop, the two yos, and the 2 stitches worked together. On the next row, you reduce those 4 stitches back to 2 by P2 tog.

I think this would give you a rectangle shape unless there’s lots of other instructions further down! Would this look like the picture of the scarf?

Thanks so much for your response! This is the whole pattern before continuing the same with other colours:
SHAWL/WRAP
With A, cast on 270 sts. Do not join.
Row 1 (WS) Sl 1, purl to end of row.
Row 2 (RS) Sl 1, purl to end of row.
Row 3 (Inc) Sl 1 wyib, *insert RH needle between 2nd and 3rd sts on LH needle, yo and draw through a long loop, yo, k2tog tbl, yo; rep from * to last st,
k1—538 sts.
Row 4 (Dec) Sl 1 wyib, *p2tog; rep from * to last st, k1—270 sts rem.
Repeat Rows 1–4 until 2 balls of A have been used

I think I don’t understand the slip one with yarn behind then as I thought this would move the first stitch to the RH needle?

count the first and last stitch as a selvage stitches and extra to the pattern ( ie. Slip first stitch and work last stitch. This just gives a tidy edge. )
The pattern will be worked on 268 stitches. The repeat is from the *.
Row 3 gives 268 X2 plus 2 selvage = 538.
Row 4 takes you back to 270 stitches

So don’t count the slip stitch as stitch 1!!
The instruction for between stitch 2 and 3 is for those stickers on the left needle, which is actually 3 and 4 of the row!

Long winded way of me saying, don’t repeat the slip stitch :rofl::rofl: