For 2021 there were modifications to the law such that the 400% FPL cliff is less relevant.  My guess is that in trying to update the (arguably already broken) software for 2021 rules they broke something in the process.  The default "I'm not smart enough to figure this out for you" response by the programmers has always been to dump part of SEHI onto Sch A Medical and hope nobody notices.  Clearly you've reached that point in their flowchart.

I agree with your analysis, the full amount should be SEHI based on the 100% repayment.  For fun try throwing in $10-20 of interest income to see if it does anything differently with the SEHI calculation.

Rick