This is called bearding. The most common problem of bearding is the batting is upside down. If your batting has a scrim the scrim goes on top. To tell if you have a scrim, one side of the batting is very smooth to the touch and the other side will feel like batting. Also, you can look very close at the edge or corner of the batting and you can see a very thin fabric like fiber that you can separate from the batting.
Glad to see changing the needle took care of your problem.