One of the hardest parts of felting is knowing when to quit. The answer is really a personal choice. Things can be felted gently, so that the stitch definition has just started to go but the piece looks solid, or they can be felted quite harshly, where all semblance of individual stitches is completely gone.
Naturally it takes much longer to completely erase the individual stitches when you're felting by hand, so you might decide you don't want to take the felting as far as you might if you were felting by machine.
One great thing about felting by hand is it is very easy to check your work so you can stop exactly when you want. Felting by hand is also a great choice when you're trying to get to a specific dimension.
I decided my swatch was done when it measured about 3.75 inches all the way around. Most of the stitch definition is gone, though you can still see the stitches right on the edges, and the swatch has gotten quite fuzzy.
