Right. Even though the plan did not provide an option to do a direct rollover, you still had the option to indirectly roll the distribution over and avoid the $1 penalty. Most people probably would not consider $10 in taxable income and a $1 penalty to be worth doing such a rollover, but as you found, there is a side effect of being required to use a paid version of TurboTax.
Although I don't generally recommend knowingly filing an inaccurate tax return because when you sign your tax return you are attesting that the tax return is accurate to the best of your knowledge, an alternative might be to file your tax return without reporting the $10 distribution and then amending by filing Form 1040-X to report the additional income (perhaps changing income tax slightly, but unlikely) and the $1 change to Other taxes. Since the entire distribution is subject to penalty, the penalty can be reported directly on Form 1040-X with no Form 5329 needed (although you might include Form 5329 anyway, it wouldn't hurt).
