What you have is §409A.  §409(a) is a totally different section.

Since the employer has reported the nonqualified deferral as required, all you need to do is to computer the 20% additional tax on the tax due on the amount reported as Code Z.

US employers (and many foreign employers who routinely hire Americans), after many years of struggle with updated guidance, are fully aware of the implications and reporting requirements of §409A, it would be unusual for them to let this slip.  What was this arrangement and what actually was the trigger?