You have the formula wrong. It's
earnings = excess contribution * ((ACB-AOB)/AOB))
The distributions made after the excess contribution was made must be added to the closing balance to get the Adjusted Closing Balance, so ACB in this case is just the amount distributed from XYZ after making the excess contribution since the year-end balance was zero.
earnings = $475 * ((distributions-AOB)/AOB))
For example if the HSA contained $5,000 before the $475 excess contribution was made and the distributions afterwards were $5,675, the calculation would be:
earnings = $475 * (($5,675-$5,475)/$5,000) = $475 * $200 / $5,000 = $19
You would then obtain a return of the $475 contribution from the other HSA with the distribution being $494 of which $19 would be taxable earnings.
