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Things kind of break down here; the proper thing to do is re-do 2018 to reflect no contribution. The other option is to let the client decide if they want to take their chances and hope they aren't audited, or if they are, to be able to convince the agent to let it slide (by arguing that it is in fact a correction or otherwise pleading leniency). In which case the 415 question is moot - if you're going to ignore the rules why follow that one? (I'm not saying I wouldn't do it; just being very blunt.)

You need to worry about 415 proration when you have a Short Plan Year of less than 12 months, not when someone enters on a day other than the first day of the Plan year and is a participant for less 12 months.

You could ask the participant if the intention was to offset the full account including loan when he took his distribution, that would clear up any confusion. My guess is the participant has no thought about the loan balance anymore and is probably not expecting to start repaying it next January but that's just a hunch.