Much of the information you have presented is good general advice but you are dismissing the most important point- separating the males and females. One a hen starts breeding (laying eggs) it's difficult to stop her if she remains with the male. Budgies housed together will lay and raise clutch after clutch, wearing themselves out, until separated. The information I rely on is from my CAV, very experienced breeders that I know personally and from my extensive reading on the topic from internationally renowned breeders, as well as from my education and experience as a biological scientist and from breeding budgies and trying to STOP their breeding (laying eggs is breeding behavior).
If you provide a healthy mature female budgie with a good balanced diet, plenty of exercise, a large, comfortable cage, adequate daylight, AND an eager compatible male she is likely to want to breed. She may begin laying eggs on the bare cage bottom, in the food dish, or anywhere else she finds adequate inside or outside her cage. She doesn't require "nesting material" as budgies do not build nests- the bare bottom of a plain wooden nest box is perfect- mine remove any bedding I provide- but other locations "will do" if she's determined. The OP's budgie is clearly exhibiting breeding behavior and appears willing to her eggs on the floor of the cage, especially if she's inexperienced. Taking away the paper she's been shredding isn't likely to stop her at this point, neither will depriving her of a healthy diet (calcium deficiency leads to egg binding), fewer daylight hours (mine have bred in winter), not touching her (I don't pet any of my potentially "breeder" hens), or rearranging her cage (tried that, too). If you remove the eggs as she lays them she will likely continue to lay them, depleting her calcium reserves. Best to addle them (shaking them hard will do it- no need to boil them) and let her brood them or replace them with dummy eggs and add more dummy eggs daily so she sees a full clutch and stops. My CAV explained in great detail how a hen budgie's reproductive tract works and why dummy eggs are helpful in stopping egg laying. Hens ovulate every two days while laying and the sperm are waiting up near the ovary to fertilize the ovum after its released. It takes about two days for the fertilized (or unfertilized) egg to travel through the reproductive tract developing into an "egg" as it goes. Once a hen senses she has a full clutch she will stop ovulating and begin intensive brooding. A hen can only sit on six or seven eggs unless she very large.
I hate to see OP's female budgie get into an endless cycle of egg-laying which can lead to egg binding and severe osteoporosis. I only hope for what's best for her female budgie- not winning a contest about who's right.
