The only living part of hair is the "bulb" inside the follicle. Everything outside the follicle is dead. If dead is replaced with living, then he shouldn't have anything other than follicles in theory. I just assumed his healing was similar to Deadpool's to an extent (as Deadpool's was supposed to recreate Wolverine's), his cells constantly renew. But that's probably down to fighting his cancer. I know they messed with Deadpool in Wolverine: Origins, but he was bald during his fight with Wolverine, maybe it's just swings and roundabouts. Different levels of regeneration.
Second theory. Since mammals can't regenerate dead hair follicles, maybe Wolverine is either part fish, bird or amphibian :P
I think I thought too much into it, and it's just simply for looks. Wolverine would look weird without hair.
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