What is the ser# and suffix? The suffix should be, no suffix,a or b. Does it have a sear safety?( a small flat dogleg bar resting on top of side plate). Or a notch cut in left grip, just to rear of mag release? If so,it is a police pistol.
I believe it's the marking for:
P1= Police School for Physical Education
B.2= 2nd Battalion, or possibly, Berlin 2nd company?
16= Weapon #16
It would'nt be a Reichswhr unit as they changed the method of unit marking after WWI. Military units began incorporating a / in their unit marks. Your translation would be a pre-Weimar(1919) marking method. Obviously before the pistol was made.
Hope this helps.