What code(s) are in Box 7?  "3" for disability or something else?

I'd contact the custodian once and ask for a correction.  If they ghost you / your client or tell you to kick rocks (they likely will IMO), then you've done your due diligence.

I'd play with the inputs on batch entry codes 4 & 74 to make it nontaxable if you've confirmed it should be.

I'd consider an 8275 disclosure to describe the issue and try to reduce the chances of a notice.  Screen 69 and google if you haven't done one before.

Tell your client not to freak out if a notice comes and send you all pages (not just the odd-numbered ones) if/when it does.