Its actually a behavior known as "wool sucking or wool eating" and it is more of an obsessive-compulsive disorder. Kittens weaned to early often exhibit this but it shows up when a kitten is removed from mom before its truly ready. It can be attributed to diet - though also can be a symptom of anemia and diabetes. (Parasites can cause anemia & the biggest culpret is tape worm - something to store way. You can tell because you will notice the segments in his poo or around his bum.)
Kittens are like puppies & babies - everything goes into their mouth. (If you dont want it there - you must be faster than they are. Though you might spray a wad of hair with bitter apple or lemon water & see if that deters him from picking up stray wads of hair. Now if I can only get my dog to stop doing that -lol)
This behavior is very common in oriental breeds. Some cats prefer to scrub things (skin, your hair, plastic, carpet, various types of material). I've had a couple cats with oral fixations. My latest one is my siamese & she scrubs EVERYTHING much to my annoyance & if I dont stop her, she scrubs the skin off my arm with her evil tongue (I swear its made of steel wool too). Its a darn good thing there are no kittens in her future - they'd be hairless & probably skinless. One of my males takes advantage of her fetish and has this thing where he gets her to bath him & he's quite a brat about it and I can always tell by the hairballs which kitty she cleaned.
Many kittens will outgrow it. However, you may need to discourage the behavior & use foul tasting things to help discourage him. Chances are he is doing this because he still remembers that feeling of safety nursing mom & is looking for something to replace that "safe feeling." Distracting him should help. Hairball medicine is a good idea (or a smidge of canned pumpkin).