It is not a bug. The 'qualifying person' for Head of Household purposes must be a relative by blood, legal adoption, or marriage. It cannot be someone who is unrelated to you. The qualifications for Head of Household and claiming someone as a dependent are not the same.
You may still qualify to claim Danny as your dependent, but you will not be able to use the Head of Household filing status.
Take a look at the following TurboTax help article for the requirements of a 'qualifying person" for Head of Household:
What is a "qualifying person" for Head of Household?
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