"It doesn't make any sense to talk about how 2020 was handled on the 2021 return."

Since when does the IRS have to make sense?  If you remember, first the loans were taxable and then they weren't.  And then there were was, if they know they were going to be forgiven, do we show them as forgiven in 2020?  So, just put the information in as asked.  If the loans were forgiven in 2020, type in 2020.  If they were forgiven in 2021 type in 2021.  There is no need to try and over complicate things.