A distribution that is less than their contributions is fine. It seems that otherwise, they violated one or more rules.

"The earnings that was rolled over into the new Roth IRA from the Roth 401(k) are included in their gross income for 2021, which makes sense."

Only if they violated one (or more) of those rules. Otherwise, Roth grows tax-free.

This is exactly why I tell people to open a Roth as soon as possible, even if you only put $500 and then don't put anything else in it for years, so that your "5-year existed" rule is met.