As soon as TurboTax realizes that you have an excess for 2021, it adds that excess to Other Income on your 2021 tax return.
You will get (probably in early 2023, depending on when you asked for the withdrawal of the excess) a 1099-SA with a distribution code of "2" to add to your 2022 return. This will probably have the excess in Box 1, however, because the distribution code is "2", the excess will not be added to income again (because you have already paid tax on that in 2021), but only the earnings in box 2 will be added to your 2022 income.
In early 2023, when you enter the 1099-SA with the distribution code of "2", you will not be asked how you spent the money; it will be treated as I outlined above.
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