It was done in Cinema 4D. Using a fabric texture you can adjust the waves and gravity, then insert vector typography onto the surface. Extremely simple in 4D, incredibly difficult and time consuming in Adobe CC
Very unlikely to do that in Illustrator, however Adobe has recently released the Fresco app which is specifically aimed at producing more realistic drawing and painting textures, beyond current Illustrator/Photoshop capabilities, so you may want to try this:
Because each individual piece of "hair" is a different shape, this was most likely done manually by creating the shapes and positioning them accordingly. This does not appear to be any "effect".
One thing is for certain, you can't get any sort of rotation effect to also alter the overall shape of objects in the manner shown in that image.
Gradients were ...