I think that is the question you are supposed to ask your client.

That means there is no penalty for early withdrawal.

Input the 2 and be done with that portion of the return.

But come on George, I wanted to find out what the exception was 😜

It means they were under 59 1/2 years old, but no early penalty applies.

Here's a reference article that might be helpful:

https://thelink.ascensus.com/articles/2020/12/16/irs-form-1099-r-box-7-distribution-codes