I like the idea of contributing $50 back, telling TurboTax that you made this $50 personal contribution and telling TurboTax that you'll withdraw the full $449 of excess; I think that that's the only viable solution. The result is that TurboTax will report the full $3949 on Form 8889 line 9 in agreement with the amount reported with code W in box 12 of the W-2, it will correctly report $399 as taxable on Schedule 1 line 8 and will not report any deductible HSA contribution on Schedule 1 line 12 or any excess contribution on Part VII of Form 5329.
This approach has the added benefit of making your return of contribution be legal. The tax code only permits actual excess HSA contributions to be returned, so contributing back the $50 makes your code W plus personal contributions be in excess by the amount returned. When making the contribution, just make sure that you specify that the $50 personal contribution is for 2020. The only concern I can see with contributing $50 back is that the HSA custodian might balk at seeing an additional contribution for 2020 after having distributed a return of contribution, but that seems unlikely.
(If you don't contribute the $50 back, that $50 distributed (and any gains attributable to that $50 that accompanied the $50 in the distribution) would legally have to be treated as a regular distribution in disagreement with the Code 2 Form 1099-SA that will be reporting the return of contribution, which there is no convenient way to explain to the IRS.)
