Normally, the tm-close-tiddler message is handled by a <$navigator> widget that encloses the Story River.
However, when displayed inside a modal, the tm-close-tiddler is outside of the Story River. Thus, there is no <$navigator> widget to process the message.
To fix this, just add this line at the start of your modal content:
edit:
To close BOTH the modal window AND the HelloThere tiddler at the same time, you need to put the <$navigator> widget around ONLY the <$action-sendmessage $message="tm-close-tiddler" ...>, like this:
By doing this, the message on the $button widget closes the modal window itself, while the $action-sendmessage acts on the Story River to close the “HelloThere” tiddler