For anyone else running into this problem, there is a fix but it's unfortunately outside of HKN. After much searching I found that there's no way to trick HKN to use shift as a hotkey on it's own, so I downloaded a keybinder program (there's millions of free ones, I'm still looking for the one I like most) so when I press shift, ctrl or alt, it's actually pressing Shift F1. That way in HKN, I can write a hotkey for <Shift F1> that'll intercept the input, and I can tell it to only push out the shift press to my game and another key to a different program, etc.
Hope that helps someone else! I'm a little shocked that this wasn't an option in HKN, but it looks like the creator was working on it before he cancelled the project.