This is a frustrating bug I've encountered on occasion when designing forms, haven't yet been able to determine why or when it is triggered.
To resolve, select text to be hyperlinked, and simply add the mailto link in the Data source section, not the Address section, of the Hyperlink details, surrounded by quotations, e.g. "mailto:hilarystoupa@awesome.com".
Only remaining issue is that you won't see the resulting hyperlink displayed properly within designer, but you can still edit the link associated with the selected text, and the hyperlink will show up and work properly in your published form.