It would have been used as a filling for upholstery, yes. While there are textiles that are woven with hair, they utilize horse or goat because of it's heavy weight and resistance to bending. Those fabrics are used in upholstery as well as things like tailoring, but human hair would not have the same needed qualities. In modern day one of the largest textile products is filling/stuffing, made now from polyester mostly. That was not an option during this time period (only patented in 1941), so they were still relying on natural fillings that have limited sources like animal hair, wool, cotton, etc. Coiled horse hair is very well suited for mattresses, for example, and they still produce horse hair mattresses today.