You are correct, the problem is internal to the program in how it handles taxable earnings on 529 plans. It's complicated and errors can happen.
But, you're not getting the gist of the answer to your problem: Just because you have a 1099-Q does not mean it has to be entered into TurboTax. Just delete the 1099-Q and probably the 1098-T (if it continues to give you wrong answers). Both are only an informational documents. The numbers on them are not required to be entered onto your tax return.
On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."
