I gave it try on my computer (Deluxe download), TT handled it perfectly. Coming up with $1679 taxable distribution (line 8z of schedule 1) and $4250 taxable scholarship (line 8r of Schedule 1). The penalty exception appeared on form 5329.
On the parent's return, enter the 1098-T with $4000 in box 1 and no other amounts. On the student's return, enter the 1099-Q first, then the 1098-T later. Enter both exactly as received (no adjustments). When asked how much of the scholarship was used for room & board, enter $4250 (that entry makes it taxable). You should reach a screen "Education Expenses Used for a Tax Credit". The box should be prepopulated with $4000, if not change it to $4000.* If you don't get that result reply back and we can try a work around.
This assumes, you going to treat the entire 1099-Q amount as a 2022 distribution, and not partially for 2023.
*When the student indicates, in the personal info section, that he is a dependent, TT assumes the parent claims the credit.
