Code 2 has nothing to do with ordinary income taxes, it is a reflection that whatever the taxable is (if any), there is no early distribution penalty. Therefore it is telling you and the IRS that there is no penalty due. The reason Fidelity issued the 2 code is you transferred the funds into a Roth IRA and there is never an early distribution penalty for a rollover, and a conversion is a rollover. Now, if you asked for a distribution paid to you and you indirectly rolled it over to a Roth IRA, FIdelity would not know what you did with the money and the Code would be "1" unless you are over 59.5.
The more relevant issue here is the taxable amount for the conversion. Taxable amounts show in Box 2a, and for TIRA distribution including a conversion, the TIRA custodian has no idea whether your TIRA has basis or not. The IRS instructions have changed over the years with respect to whether the custodian should therefore show nothing in Box 2a or show the gross distribution there. Currently, the 1099R instructions indicate that the full amount should go in 2a if the custodian knows you converted and the "taxable amount not determined" Box in 2b should be checked.
From that point the taxpayer needs to correctly input the basis from Form 8606 into the software and since there are software variations between providers, this is where most people run into problems. It really helps if you understand what the taxable amount should be under the pro rate rules, so if you get something illogical you will know that the input needs to be reviewed and changed. Most programs allow you to review Form 8606 before filing so you can see the final result.