Technically, you should probably be creating a directory named activity in your active theme’s folder (i.e., Unplugged) and copying the original bp-default’s index.php file (that you finally located) into that folder, then modifying the copy. I think.
Or, arguably, I guess you could even make a…grandchild theme? EDIT: Actually, I don’t think making a child of a child is really an option, but I don’t know for sure.