"the whole point of an S-Corp is that you don't have to pay self-employment tax on all of your earnings"

Uh, not really. The point of forming a corporation is because it makes sense to incorporate, and to have that separate entity, and probably at least 3-5 other reasons, minimum, even when you are not misled into creating this entity type. The exact same amount of tax is paid, in that both the S Corp and the Sole Prop pay 15.3% discounted by the credit back for the half-share as a business expense. It's still his own pocket. That's a very narrow perspective, in other words, and probably the least useful reason.

"TP took $99k in salary, but the Corp is showing a loss of $45k."

"why they kept paying themselves while the business was losing money"

Obviously, funds were on hand and available.

The reasonable salary is based on work performed, and value of that work, and I've never seen this "40%" as guidance in anything other than this comment in this topic, for the first time. RCReports is a great resource, though.

"pass-through income does not count toward the employee's income to determine that pension %"

You can't throw out the generic word "pension." Is there a plan? What type of plan? How does this employee participate? What sort of account(s) does this person have?

"this PT is looking at excess contributions, because their income is only $54k"

Try thinking of this example: you hire a person and pay them $100k. Your entity has a $300k loss. What is your employee qualified to contribute to their "pension" plan, in your estimation?