Bracing a stud that’s been cut too much

I'm installing a bathroom above an existing one, and when running the shower drain pipe I got overzealous without thinking and cut a 3" hole in a 2×4 for the drain (red circle in photo). Only 2 3/8" is allowed by code. How do I brace this to pass inspection? I was thinking about putting 2×8 blocking above and below the cut and then running king studs (with the 4" side facing out) down to the sill plate. Previous builder did something similar (yellow circle). Is that sufficient? This is old construction with 2" actual studs, plus it's at an angle, so I can't just use a stud shoe. Thoughts?