Paverpol ™ is a water-based textile, weatherproof and washable (when set) hardening medium used for sculpting fabrics and other materials. It is transparent but can be coloured.
This was one video about using dried moss and I thought this could be adapted easily for use with fibres, shreds of fabric or waste yarn and embellishments. I’m not sure if it could be worked into with stitch but may give this a try.
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Powertex appears to be a similar product but reviews suggest it has a better workability and longer drying time so may be better.
It may be possible to use pva for this but I would need to experiment with the thickness and drying speed as it may dry too quickly or be too runny. I’ve also seen wood glue as a recommended medium for this type of project!