Thanks. Vanguard actually has a piece on this: https://intl.assets.vgdynamic.info/intl/australia/documents/research/understanding-the-hedge-return.pdf
I think their conclusion is: less focus on yield, more on diversification. Indeed, only investing in SEK bonds from Sweden does seem a bit undiversified.
The operational cost of the hedge must be more in the basis points range. The -1% to 2% that you are referring to must be related to interest rate differentials, I think (e.g., interest rates in the US are higher than in Sweden. By, let’s say 1-2%.). This is expected: you convert SEK to USD, get a higher interest rate in the US… there is no arbitrage, so you give back what you gain from the interest rate differential through the “hedging cost”.