doc:

Those are also called polyfill or acousta-fill. Not likely real cotton. More like synthetic for dealing better with moisture in the air. It’s not good if it’s falling out but it won’t change the tuning noticeably if only a pinch fell out and no more. When I built my subwoofer I used 4 lbs of polyfill to stuff the enclosure. That’s enough make two pillows (my sub is little bigger than average). If a palm-full of it fell out from my subwoofer, I doubt it will be noticeable to human ears.

I do not own LFM-1 but from looking at the photos, the only openings to the inside are the ports at the bottom. Tilt the sub over to the side and look into the ports with a flashlight to see if that’s where it is falling out from. If it is, you may want to call technical service at Outlaw Audio and ask what to do about it. Who knows, they may just tell you to reach in and stuff it back in.