I just played around with this and it appears that the 1 on the Estimated taxes screen ONLY applies to preventing the estimated taxes from being deducted.  It had no effect on the state tax withheld that I added to the 1099-R (for the sake of the test.)

 No place that I found to input a -1 to prevent a deduction.

My suggestion:  if this is the final year, deduct the state taxes & move on.  Tell the client to let you know if they receive a notice from the IRS.  

Deducting the tax will reduce the taxable income on the K-1.  You could add a universal supplemental stmt on the K-1 telling the benes that they should each report $XXX amount of state tax refund on their 2020 federal tax return.  They are the ones who ultimately get the refund, so only fair that they should report it.

Joan