You don't HAVE to persay.. but it will grow to the point that it literally becomes the shape of the tank its in, so you'll have a box shaped hunk of chaeto.
Now pruning it *IS* a good thing, it removes nutrients from your tank (good) and it allows more to grow which sucks up more nutrients (good)
My chaeto really likest high flow and moderate to intense lighting. The only drawback I see to it is that it is a little too good at it's job. When I reduced the lighting on my 15 gal refuge on my softie tank, i saw a marked improvement in my soft corals health. I believe that this macro is very aggresive at removing nutrients from the water column.
You can go too far at this though. In my 30 Gal 'fuge on my 150gal tank, I went with really low flow and incandescant lighting and my chaeto disintegrated, turning my tank water green and causing all sorts of clarity problems. I have since disconnected the fuge from the 150 and the water in that tank immediately cleared up. I am using the 30 Gal fuge as a seperate tank at this point to grow macro algae and pods for the other tanks that I have. Just my 2cp worth.
I can't really run any flow where the chaeto is... because its in the sump, and if I disturb the chaeto the slightest bit... it releases tons of particals back into the display. Still thinking about getting an insump fuge to keep some sand as well.