There is a disconnect in IRA A reporting it as a distribution and IRA B treating it as a transfer. The nature of the transaction is primarily determined by what IRA A reports, so if IRA B treats it as a transfer, meaning that it will not be reported as a rollover contribution on Form 5498, there's a significant chance that the IRS will question whether or not the money was actually rolled over and you will have to provide account statements from IRA B to show that the money reported as distributed from IRA A was indeed properly deposited in IRA B. You'll likely also have to provide account statements from IRA a to show that the indirect rollover was completed by the 60-day deadline.
You might want to get IRA B to correct the coding to show it as a rollover (unless you intend to contest IRA A reporting it as a distribution).
