NUA with after tax contributions

Technical topics regarding tax preparation.
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Retired clients 401K has $150K FMV of NUA shares with $25K cost basis and $50K of after tax contributions. $200K of other pretax funds in account.
1. Clients custodian seems to be saying they can apply $25K of the $50K of after tax to the NUA cost basis( thus no taxable income on the in kind distributed NUA shares) and send the remaining $25K of after tax to a ROTH IRA and roll the $200K pretax to a rollover IRA. The perfect allocation of after tax contributions.

2. Other research says if apply after tax to NUA, then entire after tax must be applied ie all of the $50K of after tax has to be applied to $150K NUA resulting in $0 taxable income but NUA gain reduced to $100K. Remaining pretax rolled to rollover IRA.

After reading Notices 2014-54(allows after tax contributions to go to ROTH and pretax go to rollover IRA) and 2009-68 (implies prorate after tax) I am confused as to the allocation of the after tax contributions when NUA shares are present. Any experiences with after tax allocation to NUA shares?
 

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