That's a loooong way down to get to:

"Named after a dance."

That being said, being named after a dance is just one theory. Truth is no one remembers anymore.

Growing up in Saskatchewan, my brain almost naturally began to delineate a difference between hooded sweaters with a zipper (hoodie) and hooded sweaters without a zipper (bunny hug). It's a completely arbitrary naming convention that my brain decided to pull from its ass one day. But it stuck and I continue to use it.