The IRS is probably questioning the validity of the claim of right credit.  Shouldn't the deemed paid foreign tax credit flow through Schedule 3, Part I?

Yes, the IRS is proposing to disallow the amount claimed on Line 74 of Form 1040 as IRC 1341 Claim of Right Credit. I think you are right, it should flow through nonrefundable credit, schedule 3, but I'm not sure which line of schedule 3... I don't think the deemed paid tax credit is the normal foreign tax credit... I don't know where I could enter that number in schedule 3...

Use Line 6 instead of Line 1 and use Box (c).  Otherwise, the IRS will be looking for that number from F.1116.