this morning I spent twenty minutes watching Georgie 'make' her bed. She's got a towel in a corner she likes to lay on and apparently this morning suddenly it was All Wrong! So we got digging. And then we got biscuit making - ie. pushing out with her front paws until she's all stretched out. And then we got a bit of nibbling, some nose pushing and a generous amount of tugging. Along with a bit more digging and biscuit making. By the time she was done her towel was all the way across the floor. It was adorable.
sometimes bunnies just need to show the world who's boss of the place and rearrange. So your little guy might be attempting to do that. Or maybe he's just digging because he feels the blanket needs digging and it crumbles very nicely. Either way, is he hurting anything by doing it? Because if not, I'd just let him do his thing and than straighten up after him. Bunnies get weird notions inside their heads and they tend to stick with them. If it makes him happy and gets him some exercise and nothing's getting hurt than why not? If he's hurting his paws or something though maybe putting some cardboard in place of or over the blanket might work instead?