i'm not sure hob realizes that he has personal agency, in complete seriousness. not that he's not responsible for his actions or that he doesn't have choice, but that he isn't purely a functioning limb in the body of some greater beast.

when binx talks to him about happiness, he's confused. doesn't she realize that he was happy, for the briefest moment, simply to be shown a small kindness from rue? doesn't she realize that that's all that he could possibly, not only hope for, but even conceive of? this idea that there might ever be more--it's simply not possible. hob is of the goblin court, he serves the goblin court, he loves the goblin court, he is theirs, and it's not entrapment so much as it is nature. he is of the goblin court in the same way that a leaf is of a plant. for binx to suggest that he find more happiness, or different happiness, is to suggest to him that he stop photosynthesizing.

but he's not a leaf. his feelings know that. his hurt knows that. and he sits there absorbing the pain of it all, so lonely and lost that the only thing he can do is to hide in the stables and sob over his horse, the only being he confides in without at least partial concealment, reminding himself that he's just a smaller part in a bigger whole and he can't help it, no one can help it, this is just for him to feel. he just has to sit with the wound of it, because he's convinced himself that he has to. that to do otherwise would be against nature.

i think he has a brief moment of clarity in the maze (hob knows himself a coward) but even that is him treating his misfortune as another inevitable piece of him. it's not that he knows this is the wrong choice, or even a self deprecating choice, or, hell, the easy choice. he knows that he is a coward. and ignoring rue and the happiness that they could bring, confronting rue with only rage and hurt in his heart that he ever could've been fooled for a brief moment into thinking that he was his own being that could be cared for as such, right up until the moment that rue told him they loved him--all of it, the actions of a coward. of a leaf, photosynthesizing. of a major of the goblin court.

so he could never have reasonably done anything else.