The IRS examiner apparently failed to recognize the circumstances implied by the details of Form 5329 Part VII and incorrectly questioned the amount on Form 8889 line 13.
IRS examiners do make mistakes. If you again get a notice from the IRS, you'll just need to reply to the IRS that the extra amount shown on Form 8889 line 13 results from the application of your excess from a prior year as a deduction for the current year and is substantiated by the reporting on Form 5329 Part VII.
