Horribly confused by suggested W4 from IRS calculator while retirement planning

My spouse is preparing to retire this year, so we need to fill out a withholding form for their pension (W-4P). My understanding is that I should use the regular IRS withholding calculator to help with this.

Would I still put in my spouses pay stub data as though they were getting paid for the entire year and not stopping work to retire in July?

I put their data in as though they were working for the entire year, and the calculator told me that we are withholding too much tax and our refund would be a little above $8k. When I then downloaded the pre-filled W4 for my job, it has an amount in box 4(c). Why would I ask to have extra withholding taken out of my pay if the IRS calculator is already telling me that I am overpaying?

The over payment amount does not make sense to me either unless there is some crazy new adjustment in the tax code for 2026? We got a federal refund this year that was a little over $2k, and since neither of our paychecks have changed much for 2026, I don't understand how we are over paying so much more this year based on the calculator.