I don't know if its related, but I also noticed that the Q3 castle key to forest rots/disappears quickly. It "shows signs of age" after about 30-60 seconds and then disappears before it has any more chance to rot.
I also posted about some tit armor that took combat damage.
Since there are multiple ways for items to be destroyed or take damage I dont know if they are related or not. Obviously this isn't combat damage, however its also behaving differently than other uniques *shrug*. It sounds like its being born into the world activated though. However, 40 minutes does seem a bit long for an activated item to survive. Ive got my money that Gambit nailed this one. Im wondering if Hihi is on the same IP as other chars that have uniques and the game does an hourly check or every time the guards see it, it triggers a check or w/e..