Figured it out! See below.
—Joel

The het does not work; also the he + shin. But Mazael Tov :)

 How does the ‘ח’ not work? Is it insufficiently distinct from the ‘ה’? I do note that I've been inconsistent about which has the left leg stick down & which up. I'd intended the ‘ה’ always to stick down & the ‘ח’ up; my hand on the pen had other ideas…
 How 'bout the basic concept; does that work?
—Joel

The concept is beautiful, but it's hard to make out the letters. Are these ה's on the left, or mem sofit? And the rightmost י is so close that my עין sees an עין!

 Eran: Are you referring to the original version, or the one I posted on July 23rd?
—Joel

> How does the ‘ח’ not work?

Ambiguity: het -- mem;
Shin: looks like bet -- Rashi script.
Vav: not the same; one of them looks like yod.

I think the idea is appealing, so I hope I can explain without graphics:

The central element has a large centre with letters on both sides (stems). Except for the yod on the right, you have to guess them all. Without knowing which letters you mean, I read (RTL): ain, yod, mem sofit, mem sofit.

Then, simha is not happy at all with the het and heh looking the same.

By the way, you should discount my modern bias.

David: I see where the ḥet (ח) & heh (ה) might be confused (sorry simḥa!), but that's a bug in the Hebrew alphabet. If I were turning the surrounding text into a font I might try to differentiate them more, but in this context, with its well-known quote¹, I figured I could prefer ‘pretty’ over ‘more readable’.
 That the ḥet (ח) looks somewhat like the mem (מ) from some fonts is harder for me to see; it certainly doesn't look like the mem I'm using! Similarly with the shin (ש) and the Rashi script bet (ב): there's some similarity, but no real possibility of confusion.
 The vav (ו)/yod (י) confusion is less excusable, so a bit of background: The style of the surrounding text came from an experiment I'd done in how wide I could extend Hebrew letters and have them recognizable. To distinguish the vav (ו) from the yod (י) from the resh (ר) I chose to make the yod as short as I could while keeping the basic shape and making the vav the narrow exception to the extended style. The `bump' on the shin (ש) and the awkwardness of the ayin (ע) are both also results of this original design. I liked the alef (א) I'd done, but it's only here in the tiny text.

Eran/Simḥa: I vaguely see an ayin (ע) in the right stem—where I’d intended yod yod shin (ייש), but I cannot see how the heh heh (הה) on the left looks like a mem mem (םם) to you. I guess I should take it in account anyhow.
 … But: Once you know what letters they're supposed to be, do you see them, or still what you saw first? It doesn't need to be obvious a priori; if it works a posteriori it's good too.
 (Modern bias?)

—Joel

1. Jeremiah 33:10–11: “Yet again there shall be heard … in the cities of Judah, and in the streets of Jerusalem, … (11) the voice of joy and the voice of gladness, the voice of the bridegroom and the voice of the bride”.