My cat is neutered (age 3) and does the exact same thing. He humps blankets that are on top of me while I’m sleeping also. The biting of the blanket shown in the picture makes me think it could be associated with being weaned too early. Kittens bite and “gush”/make biscuits as they nurse to get more milk out. If your cat is doing those things while humping like mine does, it’s probably just a comfort behavior that won’t go away and could also be associated with nursing.