A distribution of the excess $1,500 contribution would need to include attributable net income. The attributable net income would be taxable. Because the $1,500 was not an amount that had been excluded from income previously (it was not an excess elective deferral that had been excluded from box 1 of your W-2), it should not be taxable again.
The late Roth conversion of $1,500 would be a separate transaction.
Ideally, the original code-G 2024 Form 1099-R would be corrected to show $0 of code-G distribution and a separate new Form 1099-R showing code 1, 2 or 7 which you would report as having been converted to Roth. You would also get a code 8 (or maybe code E) 2025 Form 1099-R showing the distribution of the excess from the 403(b) with the attributable net income being the taxable amount. Absent these corrections you would have to report substitute Forms 1099-R with explanation.
