Uneven lighting across sprites

I am trying to add simple point lighting to my 2D game but things aren't behaving how I would expect.

I created a test scene to demonstrate the strange behaviour:

Here you can see two SpriteRenderers with the Sprites/Diffuse shader drawing the squares. On top of the left sprite there is a red point light. In-between the sprites there is a blue point light. Both sprites have z=0, both lights have z=-0.5. Everything looks as it should.

Here I have added a second red point light above the right sprite. As you can see the blue light is no longer visible on the right square.

If you decrease the intensity of the right red light you are able to see the blue light again but much weaker than it should be.

I have also noticed that if I move the right square further right (away from the blue light) things render as they should.

Am I dong something wrong?

Thanks