"Should generate form 8960, but doesn't?"
Line 14 (H Code) of Schedule K-1 (1041) is simply a negative adjustment to Form 8960.
The TurboTax program (automatically) generates Form 8960 only when that form needs to be filed. Form 8960 only needs to be filed if your modified adjusted gross income (MAGI) is greater than the applicable threshold amount.
See https://www.irs.gov/instructions/i8960#idm140602295322704
