How does the recursion bottom out? If real Hugh’s response to the question is to ask the machine, then perfectly simulated Hugh’s response must be the same. If real Hugh’s response is not to ask the machine, then the machine remains unused.
I think there are lots of strategies here that just fail to work. For example, if Hugh passes on the question with no modification, then you build an infinite tower that never does any work.
But there are strategies that do work. For example, whenever Hugh receives a question he can answer, he does so, and whenever he receives a question that is ‘too complicated’, he divides it into subquestions and consults HCH separately on each subquestion, using the results of the consultation to compute the overall answer. This looks like it will terminate, so long as the answers can flow back up the pyramid. Hugh could also pass along numbers about how subdivided a question has become, or the whole stack trace so far, in case there are problems that seem like they have cyclical dependencies (where I want to find out A, which depends on B, which depends on C, which depends on A, which depends on...). Hugh could pass back upwards results like “I didn’t know how to make progress on the subproblem you gave me.”
For example, you could imagine attempting to prove a mathematical conjecture. The first level has Hugh looking at the whole problem, and he thinks “I don’t know how to solve this, but I would know how to solve it if I had lemmas like A, B, and C.” So he asks HCH to separately solve A, B, and C. This spins up a copy of Hugh looking at A, who also thinks “I don’t know how to solve this, but I would if I had lemmas like Aa, Ab, and Ac.” This spins up a copy of Hugh looking at Aa, who thinks “oh, this is solvable like so; here’s a proof of Aa.” Hugh_A is now looking at the proofs, disproofs, and indeterminates of Aa, Ab, and Ac, and now can either write their conclusion about A, or spins up new subagents to examine new subparts of the problem.
Note that in this formulation, you primarily have communication up and down the pyramid, and the communication is normally at the creation and destruction of subagents. It could end up that you prove the same lemma thousands of times across the branches of the tree, because it turned out to be useful in many different places.