Why doesn't tax retained from a pension plan distribution to an estate, entered into Turbotax Business as "Other Withholding," appear as a credit on form 1041 Sch K-1?

Except for backup withholding (which this almost certainly is not), withholding cannot be passed through on a Schedule K-1.  A refund of withholding will have to be received by the estate and then distributed as cash to the estate beneficiaries.

(To avoid this situation, withholding should generally be declined on distributions made to an estate.  There is no requirement that mandates a minimum amount of withholding, however, a default of 10% must be withheld if withholding is not explicitly declined.)