Why are minifigure head studs now hollow?
Part (or mould) changes have numerous reasons, the main ones being:


decrease mould complexity and thus production cost (for example  to )
decrease plastic quantity used and thus production cost (for example, look at the bottom of several 1 x n bricks — the new ones have hollow tubes)
increase part sturdiness (for example  to  — honestly, how many of these did you break as kid?)
add functionality (I have no example in mind, but considering the cost of new moulds, they probably do that only when it has to be replaced, or they treat it as a new part altogether).


Making sure a part fits better into the system is a huge factor in new part creation nowadays, and designers will get a new part produced easier if the part plays nice with the other parts, mainly in terms of connection possibilities, but also of existing similar parts. In the past, things were way less rational.

I'm not so sure it influences part redesign, but it could. At the time the hollow stud appeared on the minifig heads, however, functionality was certainly not the main interest, so I would bet on mould complexity. Of course, since it added functionality anyway, you can count on designer to use it. So it's a bit of a chicken-and-egg problem: did the designer ask for the new functionality first, or did the mould change first? In this case, I would say the latter.

EDIT: Even if I answered the "full stud" against "hollow stud" part, I was intrigued by the "anti-choking" argument of having not only a hollow stud, but even one which was fully hollow, that is, you could see through it. So I asked Jan Beyer, LEGO community manager, about it and it turns out the "non-choking" reason was indeed correct. Here is his answer:


  Fast answer:
  
  This is correct, previous the hole was made in the element due to product safety if the element was swallowed.
  These regulations changes from time to time, and it has been evaluated and decided that the hole is no longer needed due to safety regulations.