Please clarify - what do you mean by "How do I fill out #2?"
Active-duty military are considered to live in their state HOR no matter where they are stationed. Their active-duty pay is considered to be earned in their state HOR.
When you complete the My Info Personal Interview:
Select California as your state of residence;
Answer "No" when asked if you "Lived in another state in 2020?" That question only applies if you changed your state of residence in 2020.
When asked if you "Earned money in another state?", answer "No" (unless the military member had non-military income in the state where you are stationed).