Tax Schedule/Summary Reports only showing Income

I find that setting the Tax Schedule Information in a tax-deferred account as Transfers Out: "1099-R: Total IRA taxable (or gross) distrib." has ABSOUTELY NO EFFECT on the Tax Schedule or Tax Summary reports. It is only the recording of an income category (with this tax line item) in a taxable account where the distribution is sent that affects these reports. And that works perfectly once I change the transaction in the taxable account (from account where the distribution came from) to an income category. What am I missing?

On the Tax Schedule report, the 1099-R transactions should appear in their own section below Schedule D.  On the Tax Summary report, the 1099-T transactions should appear in the Transfers section.

When we set the Transfers Out to a tax line item, we're fixing a tax line item cash transfer transactions from the tax-deferred account to a non-tax deferred account.  You should be able to confirm this behavior by examining the transfer transaction in the destination register (select Edit > Transactions > Tax-line item assignments or, in a Split Transaction window, Edit > Tax-line item assignments).

The only reason Quicken should have excluded the transfer transactions from the reports is if there is a filter in place: select Alt + C.  For example, on the Advanced tab, verify the transfers are not set to be excluded.