If Vanguard mistakenly put the $2,695 into your husband's Roth IRA in 2022 and then later in 2022 processed a return of contribution of that $2,695, your husband correctly received a 2022 Form 1099-R with codes J and 8 in box 7. The amount distributed would have been adjusted for any investment gain or loss on the amount returned and any investment gain shown in box 2a would be taxable on your 2022 tax return.
I don't see why there is any need to amend your 2021 tax return. Just enter the $2,695 Roth IRA contribution into 2022 TurboTax, indicate that $2,695 was returned, and enter the Form 1099-R. TurboTax will prompt for an explanation statement where you'll describe the contribution and its return since the amount distributed can differ from the amount returned due to investment gain or loss.
