Only a designated beneficiary is permitted to roll an inherited IRA over to an inherited IRA (traditional or Roth). Only an individual can be a designated beneficiary (§ 401(a)(9)(E)(i)) and the estate of the decedent is not an individual, so the estate is not a designated beneficiary (§ 1.401(a)(9)-8 Q&A-11).
Section 402(c)(11)(B) allows a trust to be treated as a designated beneficiary under certain circumstances, but an estate is not a trust. Also, a 401(k) is not an IRA. An IRA is allowed to be trustee-to-trustee transferred to an inherited IRA for the benefit of an estate or a trust because such a transfer is not a distribution or rollover. An inherited 401(k) is permitted to be moved to an inherited IRA only by distribution and rollover.
The forum algorithm blocked the PLR numbers for some reason so you might try posting them again in a different format, perhaps as URLs. However, I'm sure that they do not allow for a rollover to an inherited IRA under these circumstances. Perhaps they are referring to the transfer of IRAs, not to distributions from a 401(k).
