This is a real problem that only Fidelity can correct, if it's even possible to correct. The code-1 Form 1099-R implies that the funds were moved from your grandfather's IRA to an IRA owned by you instead of to an inherited IRA maintained for your benefit. It also implies that the original movement of funds was a taxable distribution paid to you to you from your grandfather's IRA and a regular, possibly excess, traditional IRA contribution made by you.
Did Fidelity hold this your grandfather's IRA? If so, it's almost unimaginable that Fidelity's estate processing division would have made such an error. I assume that you received no (2020? 2021?) Form 1099-R with regard to the movement of your grandfather's IRA to the account maintained for your benefit, otherwise the Form 1099-R substantiates that you received a taxable distribution that was not eligible to be rolled over to an inherited IRA. A non-spouse beneficiary is only permitted to move an inherited IRA by nonreportable trustee-to-trustee transfer, not by distribution and rollover.
