I live in a country where people speak
German and where the name
Hedwig is present (albeit considered rather old-fashioned nowadays), and I can confirm first-hand that
Hedy is a common short name / diminutive for
Hedwig here. So I fail to see a "big mistake".
What's possible is that "
Hedy" has more than one etymology. Of course a Hebrew name of "Hodiya" could also develop into "
Hedy", written in exactly the same way as the
German "
Hedy".
Do you have a good source to back up this alternative etymology?