I should let @dmertz answer because they are much smarter than me, but...
As I understand it, if you are in good standing with loan payments when you leave the company, and the only reason for the deemed distribution is that you left the company, then it is considered a "qualified" offset distribution. You would have until the April 15, 2024 tax filing deadline to either repay the loan (if they will accept the funds) or deposit an equal amount into a private IRA, and call it a "rollover" and it won't be taxable (because you--sort of--moved the retirement money from one qualified account to another). And it would be a different code, not code L.
However, if you are in default on loan payments, then it is not considered an offset that is eligible for rollover.
It's very hard to be in default on a 401k loan since I believe it is mandatory for the payments to be withheld from your paycheck. Maybe you're paid by the hour and you don't get enough hours to enable the payroll deduction for the payment?
At this point, if code L is correct (that you were in default) you can't cure that by making a repayment. You owe income tax on the 1099-R amount and a 10% penalty if you are under age 59-1/2. If you do make a loan repayment, that creates an after-tax basis in what is usually a pre-tax account, and as a result, some small portion of your retirement earnings would be non-taxable (to reflect the amount that was already taxed.)
Given that fact, I'm not sure there is any real value to repaying the loan at all. Unless I am missing something.
In order to treat this as a qualified offset distribution that is eligible for rollover, you would have to find out why the plan considered you in default, and see if you can get them to issue a corrected 1099-R. Maybe there,was a mixup due to the company buyout, and they mistakenly thought you were in default when you were not.
