I've made hand cut chenille before.
I remember a piece made with layers and layers of recycled t-shirts, which I had meant to make into a throw pillow but it was so stiff it became a bath rug. It had a great texture!
That didn't fray, obviously, it was jersey knits.
I was trying to make a piece to put on the back of a cute taggie blanket for my friend's on-the-way baby, just for some cool texture, but taking it out of the wash, this chenille doesn't work out at all. Admittedly it still feels kinda neat, but I was going for the orderly fuzz of clipped chenille, not this linty thready Jackson Pollock mess.
I was worried this wouldn't work because my flannel was pre washed, but I think it was more important that I didn't see and cut the channels on the bias- I'm confident that would result in much much less loose-thread-vomit than what you see here.
I used up all my large flannel scraps, though, so I'm thinking of alternatives. Joann's has recently gotten Minky (called "soft and comfy") in prints, and I also have small bits of interesting fabrics in my stash- no decisions yet.