The 10% penalty you are seeing is for failing to remain an eligible individual throughout an HSA funding distribution (HFD) testing period. This says that you told TurboTax that you contributed $7,900 to an HSA for 2017 by making an HFD from an IRA in 2017. That doesn't make any sense since the contribution limit for someone age 55 or over for 2017 was $7750 and you said that you "continued to make contributions," suggesting that you contributed either through your employer or by personal contribution with after-tax funds, not by an HFD.
It might be simplest to delete the 8889 form from TurboTax and redo your HSA entries.
