At the end of the day, there are many different ways to skin the cat....but this is MY preferred way with my train of thought.
HYDROS gets power, HYDROS gives power to the Heater Controller, The Heater Controller gives power to the heating element.
Therefore, HYDROS should get this first call. Set your ON/OFF temps tight. This is the GOAL of what we want the temp to be. For example, lets say ON at 77.5 and OFF at 78.0.
To ensure that the heater is actually trying to turn on, let's set your Heater Controller to 1 Degree HIGHER. This ensures when HYDROS says the heater should be on, its actually on. But it would cut off at 78.
Then, we can set IF INPUT/DEPENDENCY UNAVAILABLE. This means if the temp sensor goes unknown, the dog chews through it, IF HYDROS doesn't know what to do, should it TURN ON or TURN OFF. We should TURN ON. That way, we get the alert the temp is offline, power goes on to the heater controller, and its still maintained, providing that SECOND LAYER OF REDUNDANCY. Yes, it goes up a degree, but it's maintained.