There appear to be a change made in 2.4.1 where we can no longer hold 2 or more of the same horns on the same character. Before this update I used to be able to pointlessly hold lots of Happy Horns. I could not find this change in the update news.
Before the update, Custom Horn Kit used to always be able to always give horns, including horns we already have. Now, if the random horn happens to be what we already have, it gives us nothing as this update is now preventing 2 or more of the same horns on the same character.
Try equip happy horn and put all the other horns into the vault, then use "Custom Horn Kit".
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Perhaps it is due to the horn relays being removed? If you have a relay it will breakdown into 1 silver dust so maybe Bungie made it so you could not have more than one of the same horn (as you stated) to keep players from farming silver dust. If this is the case then Bungie has really sunk to a new low by taking our money and giving us nothing in return I really really hope this is not the case.