Recycling is mainly used for industry characters who recycle isotopes and T1 mods into commodities and materials. if I were you, and I didn't really want to go full blown Indy. I would just put all the T1 equipment that you don't need, up for sale on the markets.
The problem with prototyping is that its not really useful unless you plan to produce stuff. In theory you could make prototypes and sell them on the market. But that is a lot of EP and kernals just to be able to sell a few proto's. You could technically also make prototypes to use on your PVP builds, but to make best use of them, you need extremely good fitting skills, and this is a very expensive way to go. What most players do, is have a PVP toon, who is solely dedicated to PVP or PVE. If you want to do industry, than I would recommend making a second account and dedicating that account to industry. To be a high end indy toon requires major investments of EP into the industry skills. The same goes for combat. to be really good at PVP/PVE you need to invest lots of EP into it. So if you try and go with a hybrid build, it will work, it will just take you a lot longer to be good at any one thing because you are spreading your EP around, instead of specializing.