OP, what you have observed is (as said by others) a minor cosmetic issue of the very excellent Conti tires. If you use a small scissors to keep the offending threads trimmed, you will never have the appearance that you are concerned about. I wouldn't be surprised if the magnitude of your problems came from the axle grabbing the hanging thread and acting as an unwinder to pull more and more of the thread off the tire. Just get it cleaned up, and you will be fine.

Or to put it into Jersey-ese, "fuggeddaboudit".