I would like to recreate this effect in Houdini that is easy to do in C4D: https://vimeo.com/59735927 [vimeo.com]
Is there a way of instancing objects on hair and allowing soft body dynamics? If so, can one randomize the quaternary rotation around the hair?

That's not instancing. It looks like each copy is uniquely deformed by each wire. You can do this in houdini using a duplicate node, and some vex to build a wire deformer that can run over all copies. In Houdini 18, the orient along curve can build the proper orientations to make it stable, or if using a hair sim orient can be used directly from the simulation.

Thank you for pointing me in the right direction. I will try to see how far I can get using your suggestions.