I would say yes and no to the first question about killing them, I have pulled rubber worms with rusty hooks out of a few fish's uhh... bottom side passage,

that they were actually passing, that happened to me twice. But have also hooked fishing line before that had a brush hog on it, not sure for how long but the thing was swelled up to the size of my hand, I'm not sure how long it takes for that kind of thing to happen.
As far as how it happens, I guess the worms could have been stolen off the fisherman's hooks by small fish and maybe they came by and sucked them up, or they bit or broke the fishermans line trying to get them and now they have it
