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Changing out the 1.25" for a 2" is fine. Others have done it many times. Some owners have even added this receiver and carry or tow much more than 200 lbs, but it doesn't sound like you need to do this. Most of this work was done by folks very experienced in welding metal such that it will support this. Unfortunately, I have also read stories that these mods have failed or caused some problems. But with your 200 lb requirement, I wouldn't worry.
The full 2" receiver hitch is heavier by design when installed and Keystone's concern is a tendency for adding too much weight with the larger receiver and they don't want to risk the liability. You could also consider having the 1.25" extension cut off and and have someone fabricate and weld just the 2" extension to keep the distance sticking out the same as what you have. This way you gain the 2" fitting without the extra weight, but an expert hitch person should be able to do this. You might even want to put a warning label on the receiver to remind you and others (if the trailer changes owners) but you must still remember that it can only support 200 lbs. I think your bikes or the carrier will fall within this limitation just fine.
The only "extra" thing you might consider is using some kind of shim or device to eliminate much of the movement where the bike rack or carrier inserts at the receiver. The receiver being so far from an axle (about 12') will shake around a lot more if it is a loose fit, and I'm not sure how bad this can be down the road, but this is your choice to consider.
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