Definitely not O.briareus (Common Caribbean). It is most likely O. mercatoris (suggested in the picture with the arms curled).
No clam is safe with an octopus. That being said, I am not sure about the size differential as a dwarf is not likely to be interested in large prey but I would not risk it. He/she is not likely to be able to pry the shell apart but is likely to harass it. Additionally, it may get an arm caught in the shell as this anecdotally has occurred in the past.
IF I am right about the species, then large egg. No octopus is easy to raise from hatchling but O. mercatoris is one (if not the) easiest. We have a few journals of Wild Caught->tank born->captive bred but they are quite old as we have not seen many fertile females in the last few years.
A female will lay eggs near the end of her life. If they are fertile, they will hatch and she will die shortly afterwards (several mercs have lived a month or two after hatching but most die within a week). Cephs are not hermaphrodites so there are both males and females and males and both are required to create and fertilize the eggs. However, they mate after sexual maturity and the female will store the sperm until she is ready to fertilize and lay the eggs. It is very likely that this one (guessing from size) will have mated but I cannot tell the sex from the photos. Try to observe the third right arm (clockwise with your eyes in the same orientation as the octopus). If the arm is mostly held tightly curled, this would indicate a male. Here are some photos and tips on trying to sex an octopus.