We had a great stay at Thiago's place - but also thought it would be worth outlining some things other travellers might want to know.
First up, Thiago's mum Vera is lovely, (she did our laundry for free for example), the views from the hostel/bnb are absolutely stunning and the prices were a lot cheaper than others we saw in Rio during Carnaval.
The bnb is maybe 15 mins walk through the favela or a 3 min moto taxi. Interestingly, half the yellow cabs we took in town refused to take us into the favela and drop us off - though we felt that said more about the area's former reputation rather than the current reality.
Overall we felt safe and there is a constant police presence in the lower part of the favela, where there are other hostels and restaurants. The area has a reputation as an exemplary pacified favela in Rio.
However, the bnb is slightly further up the hill, and on several late nights/early mornings walking home from Carnaval we saw young locals with guns. Despite the initial alarm, they were friendly, said hello to us and chatted away - but they were armed all the same. We mentioned it to Vera, but she said not to worry and reiterated that we were safe. We probably saw guns on three or four occasions during our stay.
Please note, this isn't supposed to be a warning or a scare story - it's simply an honest account of what we experienced when we were there. We debated mentioning it on here at all, as Thiago and Vera are lovely and what goes on outside their door is out of their control, but thought most travellers would at least want a heads up and can then make their own decisions from there.
The favela was a fascinating place to stay and it's obviously important that all areas of Rio benefit from tourist money. Overall we honestly felt safe and had a good stay, but if you have concerns, it may be worth doing some research on Chapeau Mangueira and Babilonia before committing. The place itself was simple but great and the family are really lovely.