This is correct reporting. That figure is necessary for the new QBI deduction. It will not raise the amount of taxable income each of the shareholders receives. Rather, the distributive share of those wages can assist with the complicated Section 199A deduction, especially if the shareholder's income is above the phaseout threshold of $157,500 of taxable income if Single, Married Filing Separate or a Head of Household, and $315,000 if a Qualifying Widower or Married Filing Joint. The larger the number in Box 17 with a code W, the better it will go for the shareholders with that level of income.
This FAQ explains in more detail (click on the View the entire answer, and then the embedded link How is the deduction calculated? (Not for the faint of heart!): https://ttlc.intuit.com/replies/7019998
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