The treatment is correct. "Income" simply means it's reportable on your tax return. As long as it's not being included on Form 1040 line 4d (or line 4b for IRA distributions), it's not being treated as taxable income and has no effect on your tax return other that to be included on line 4c (or line 4a for IRA distributions) and to have the ROLLOVER notation next to the line.
