Oh wow, this thread was resurrected from the dead haha! I made this thread when I first got Boomer and thought that he absolutely had to have a happy hut. In the end I realized that the risk of him getting tangled up in it while I'm away at work was much too great, so I took it out of the cage.
It took me over a year to do it though! I just felt so bad that I always convinced myself to let it stay until the weather got warmer, etc. For a while, I used those cardboard tunnels sold for hamsters. I cut holes in it and looped a safe natural rope so I could hang it from the ceiling of his cage. He would go in the tunnel if I put almonds in it, but he never would sleep in it. Instead he would sleep on this natural, spiraling branch. After a while, I took the tunnel out of the cage too. It was ugly (I'm not good at crafts) and took up space.
He's been without a hut or a tunnel for over 3 months now and he's acting normal (if not more stubborn - but I attribute that to the terrible twos stage he is now in). So to those who have second thoughts of the happy hut's safety, I recommend just removing it. Maybe with enough people not using it, the manufacturers will revisit the design and make something that is 100% safe for our birds. You can also use safer alternatives such as cardboard tubes, coconut shells or grass mat tunnels. I think anything cloth based, even some that are fleece, will have strings in them, hence dangerous.