You have a good grasp of the situation.
Because an HSA Funding Distribution is an otherwise ordinary distribution (it only becomes an HFD if reported as such on your tax return), if it was done within 60-days a rollover of $4,850 back to a traditional IRA could have been done if you had been able to come up with funds to do so. That would have eliminated the 10% early-distribution penalty. However, if you were able to come up with such funds, it probably would have made no sense to do an HFD in the first place rather than make a deductible HSA contribution, so that may not have been an option.
Since it's too late to do a rollover, you've failed to complete the testing period for the HFD and the $4,850 is subject to a 10% penalty and inclusion in income no matter what you do, it makes no sense to report the IRA distribution as being an HFD. By reporting it as an ordinary IRA distribution not deposited it into an HSA, at least you'll be able to claim the permissible portion of the HSA contribution ($3,638) as a regular personal HSA contribution for which you get a deduction on Schedule 1.
You really do want to obtain a return of the excess contribution. If the excess is not corrected by a return of contribution before the due date of your 2023 tax return, including extensions, you'll owe a 6% excess-contribution penalty with your 2023 tax return. After that you'll continue to owe a 6% on this excess each year until you can either apply the excess as a contribution for a subsequent year or you obtain a regular taxable contribution from the HSA equal to the amount of the excess with no adjustment for investment gain or loss. If that distribution is obtained before age 65 (which you would want to do to keep the 6% penalties from piling up), it will be subject to a 20% additional tax. (You could also spend your HSAs to zero on qualified medical expenses to eliminate the penalty but doing so does not seem to actually eliminate the excess).
Be aware that one or more HSA custodians (I don't know which ones) shirk their responsibility to calculate the investment gain or loss attributable to the amount of excess contribution being returned required to adjust the amount distributed, so you may have to do that calculation yourself. If your HSA custodian is one of those, you'll tell the custodian the amount of gain or loss amount in addition to telling the custodian the exact amount to distribute after applying the gain/loss adjustment to $1,212.
