Those little ‘hairs’ you see all over the body and chelipeds of your hermit crab are not hairs at all. They are an extension of the exoskeleton and are called setae.
A seta is an elongate projection with a more or less circular base and a continuous lumen; the lumen has a semicircular arrangement of sheath cells basally. [1]
Revising the definition of the crustacean seta and setal classification systems based on examinations of the mouthpart setae of seven species of decapods A. GARM Zoological Journal of the Linnean Society, Volume 142, Issue 2, October 2004, Pages 233–252
What in the function of setae?
Not all setae serve the same purpose. There are seven types of seta that perform the function of feeding, grooming, locomotion, sensory input and water uptake. [2]
Why are hermit crabs hairier after a molt?
The setae are part of the exoskeleton and over time they wear down. When the hermit crab molts the setae are regenerated along with the rest of the exoskeleton.
References
[1] Revising the definition of the crustacean seta and setal classification systems based on examinations of the mouthpart setae of seven species of decapods A. GARM Zoological Journal of the Linnean Society, Volume 142, Issue 2, October 2004, Pages 233–252
[2] The Crustacean Integument- Setae, Setules, and Other Ornamentation-Anders Garm, Les Watling
[3] Functional morphology primary olfactory centers hermit crab Coenobita clypeatus Marta Polanska, Tina Kirchhoff, Bills Hansson, Steffen Harzsch