Yes, this does seem strange.
When you enter the distribution for the 1099-SA, the amount of the distribution is added to Other Income (line 8 on Schedule 1). So your tax goes up or refund decreases. Then, when you continue and indicate that it was not for qualified medical expenses, then the refund/tax stays the same, because the distribution is still on Line 8 of Schedule 1 (1040).
Now I have to think of really unusual situations, such as the interaction of the Earned Income Credit or the Premium Tax Credit due to Adjusted Gross Income.
Are there any credits on your return?
Otherwise, we would have to ask you to make a copy of your return (the 1040 and Schedules 1, 2, and 3) before you enter this 1099-SA and after you enter the 1099-SA and compare them line by line until you see what changed.
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