Most polychaetes reproduce like corals do; they release gametes into the water, the larvae have a planktonic stage and then settle out as juveniles. I think most are hermaphrodites but usually not simultaneous ones, ie they need another feather duster nearby to produce offspring but each worm can be male or female. It's probably not likely this would happen in a tank with a filter. I have 2 large feather dusters and many small ones that came with my live rock. The small ones seem to be getting more common but they may just be moving around and that's why I seem to be getting "new" ones. I'm not sure how big the little ones will get but some are definitely growing. There are zillions of species of marine polychaetes and they cover a huge range of sizes.
the feathers are the worm's gills, btw.