Bulk capacitor needed for USB device that is always attached?
If it's a guideline or recommendation, then read the datasheet and figure out what the reasoning is behind the guideline. It may not even be applicable to your design. 

Since the hub is an internal hub and the devices were not going to change (not plugged in or plugged out by the user), then you probably don't need a big capacitor because you won't have voltage spikes from hot swapping, only during power up. I'd go with a standard bypass value like 1uF.

If, however, you were designing for a consumer device and you don't know what the load is going to be (could be a 2A phone, which will be a heavy load) they you could have a problem, you may want to go beyond the 120uf. 

My point is they are recommendations not requirements (or strong recommendations), the manufacture recommended them because they probably had customers that forgot to put them in and they complained. Or they experienced dropouts during testing, so they put the recommendations in the sheet. Since your application is different you can ignore that recommendation.