Your example is (unfortunately) far too complex for me to answer your
substantive question, but the sub-question "Why does \hyp[h]enation {/word/}
inline [cause] the whole /word/ [to] disappear ?" is much easier to answer.
\hyphenation {<word>} tells TeX how to hyphenate subsequent occurrences of
<word> in the text; it does not expand to a word with valid hyphenation points
embedded but rather expands to the empty set.
Philip Taylor
