Is the hair slipping out of the skin or is it breaking off the hair shafts?

I'm not sure. There are no bald spots, just a lot of loose hair, apparently, in no specific spot(s). I did get it several years ago so it might be an effect of the leather getting older. Do you know what causes this?

There's something called "dry rot" which is when the oils in the leather slowly evaporate or harden and the individual fibers in the skin begin to shrink from one another, pulling apart. The leather won't hold stitches, is prone to falling apart when wet, and tends to just be very fragile. Hair also pulls out of dry rotted leather easily. Insect damage is also common and not super obvious; larvae of certain moths and beetles will eat the hair for protein and this causes hairs to fall out as the larvae chew through fur and feathers at the base of the skin. My guess is insect damage since it's so common. You can arrest the damage by placing the skin in the freezer, but it will require mothballs or another insect-repelling treatment to keep still furs (like wall hangings, rugs, taxidermy, etc) from attracting new pests. Kinda like how you have to take care of your nice wool sweaters or they do inevitably get eaten.

Oh, I've seen plenty of damage done by bugs, grr. I suspect the leather is getting dry, but maybe I'll leave it outside one of these wintery nights just as an added measure. Thanks!

40?? DAMN thats a nice hide. I gotta think about this one, JEEZ.