Okay, here's how I would do it:

An SEP would be based on the business income. That amount isn't SEP, but IRA limit ($6,500). Clearly an error. The 2021 tax return reported it as SEP, so you would amend that.

Next, it was, in fact, excess = disallowed. That means reporting it and paying the excise tax(es).

That amendment would change it from SEP to disallowed IRA. Now you straightened out the nature of the error and can get on with corrective actions. Typically, that would be: Take the corrective action(s) in 2023. Penalty will be incurred in 2023. Address it on the 2022 tax return. For 2023, there will be a 1099-R for the distribution for P = prior year.

If the person can apply the excess to 2022, that allocation (call it early contribution) will eliminate needing to be removed. Otherwise, it needs to be removed (or allocated to 2023). Plus earnings, although things are not going well right now.