Very interesting, thanks for posting the transcript. It doesn't fully match what they told me, regarding reporting to the IRS. Here is the verbatim quote from my chat with MS:
I can see that you are chatting in about the code N when you imported your tax form into TurboTax. This was not reported to the IRS. This is an identified issue when importing to TurboTax. Our technical team is currently investigating this and working to get it resolved.
