That dialogue NEVER popped up for me. The third step or what ever it is says hit close and then choose Home2 but this never happened it just closes the app. Even after reinstalling it the dialogue box never comes up.
I didn't think it popped up for me either, when it popped up, in my mind I was seeing this part, step 3:
Then set Step 3 to TouchWiz home or whatever launcher you want.
But it wasn't, it was step #5, I realized after it flashed up there and I just picked TouchWiz.
I cleared the data on TouchWiz, didn't help, so I installed APEX. When I hit the home button after it installed and it asked me to choose a deafult action, I picked the Home2 then (I had it back on my phone) then oppened the Home2 and just went through the steps again, even though I had them chosen already and when I hit the close button, the option can up again and I picked Home2.