There are a few things to notice here.
1) You can't simply create a new phraseology mod and expect FS to use it. You must ALWAYS start by replacing an existing phraseology using an identical identifier. So the first step is always to identify how FS says a specific phrase, then create the mod.
2) FS ATC does per default use "touch and go", it does not use "closed traffic". So there must be a phrase mod loaded in EditVoicepack that add "closed traffic" as a variation to "touch and go".
3) I do not really understand why you would replace "closed traffic" with "hand circuit? "Closed" or "touch and go" indicate the action of landing and then taking off immediately - replacing this with "hand" would loose this. I suspect "hand" really should be inserted somewhere else. Unfortunately I do not have the time right now to find the place - or more accurately -the time I have is spend adding a new feature to EditVoicepack XL.