I love these types of stitched materials! My grandmother made a few of these for us when we were kids, really little kids. Sadly I don't know if any of them survived, it would be cool to get my hands on if it still existed!
We had this really nice nurse knit our son a hat when he was born, it was adorable! We still have it and I refuse to throw it away lol my wife wanted to toss it. I said hell no, I'm going to use that thing when he has kids!
I wouldn't throw that stuff away, the wool but then again, I don't have a roll of it around the house. You could give it to your cat and turn it into a toy lol