There's a lot of non cosplayers doing it now too. You often see a few huggers at the Hachiko exit of Shibuya. This is what they get up to
YouTube - Free Hugs - Shibuya Tokyo - another True Story
Me, I'm definitely a hugger! I've never had a problem getting hugs from people here. MMM your experience sounds bizarre - I can totally understand you were in shock! What a strange thing to say. I'm a firm believer that physical contact is a necessary part of life!