The Thrift Savings Plan (TSP) subcontracts certain function to outside companies. Defaulting on a loan language is boilerplate in their experience. They do not understand what is really happening in this circumstances.
You have two options. Contact the TSP call center and have the loan declared and early distribution in 2022, or wait until 2023 and do the same. Remember to file the Form 5329,
Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts
If you are disabled you may qualify to exclude the early distribution penalty.
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