Retirement tax questions

Yes, I got the statement that I'm eligible for a COVID exception.

 

On the next screen though it says I have a $0 distribution but only have to pay tax on 1/3, $0. The box under it is not checked.

 

The code in box 7 is 1. If I change it to 2, TurboTax still calculates the taxable interest incorrectly. I am fairly certain this is a TurboTax error that their engineers are going to have to address.