[Edit: See the follow-up replies below since this does actually sound like a return of excess contribution is being done.]
If you choose to simply apply the excess as part of your 2021 HSA contribution, on your 2020 tax return the excess will be treated as taxable as income (because is was excluded from the amount in box 1 of your W-2) and it will be subject to a 6% excess contribution penalty. With you apply the excess as part of the HSA contribution for 2021 that you are eligible to make, it will be treated as a personal contribution and you'll receive a deduction on Schedule 1 for this personal contribution. [However, upon a second reading of the question, it seems that this is not the approach being taken.]
Your W-2 is correct as issued.
To avoid the 6% excess contribution penalty you can obtain a return of the excess contribution before the due date of your 2020 tax return and then just make normal HSA contributions for 2021. [It appears that this is the approach that is being taken, with the amount distributed as a return of excess contribution being used to make a normal personal HSA contribution.]
