If the distribution occurred in 2021, code P is correct. Code P on an 2021 Form 1099-R means taxable in 2020. TurboTax's text in the drop-sown selection assumes it's a 2020 Form 1099-R.
Code P on a 2021 Form 1099-R has the same effect as code 8 on a 2020 Form 1099-R except in the case where there is tax withholding. The tax withholding always applies to the year of the Form 1099-R.
