Examples:
I try to begin with the simplest: An iron gear wheel is made of iron plate, this takes 10 secs ( https://forums.factorio.com/wiki/inde ... gear_wheel ).
So if you recylce it, by a probability of 1:2 you get either an iron-gear-wheel or an iron-plate. This "decision" takes 10 seconds. If it remains as iron-plate, the process is over and the plate is put out.
But if it remains as iron-gear-wheel, the process goes into the next round: By a probability of 1:2 the wheel remains a wheel. This decision takes 10 secs.
You can imagine, that after four rounds, the probability to get iron-plates is 16:1 - which means every 16th iron-wheel remains as wheel. Now 40 seconds are over or 4 "turns".
This is the limitation of the recycler: It has only a limited time or number of turns to deconstruct things!
What does this mean? In this case: by a chance of 1:16 an inputed wheel, is not recycled! Some electricity is burned, some time has been taken, but nothing happened!

Lets take for example an transport belt: consists of wheel and plate. And a wheel consists of plate. Now you have 3 paths: Either it remains as transport belt, or it gets a wheel and a plate or only plates. The probability, that it remains as belt sinks to 1:3. But the time, needed to output only as plate rises. But now, by probability of 1:3 there it remains as wheel and plate. Then - in the next turn - the wheel is tried to recycle: See above!
You see: The calculation is relatively simple:
Step 1: Look, which ways it was possible to create an item. For each way, the time of all former steps are added.
Step 2: Remove the steps, which are not possible to obtain in the time, the recycler has left (for example maximum 40 secs).
Step 3: dice, which step will remain. Subtract the needed time from the time, the recycler has left.
Step 4: By random take one item you have now and try to recycle that (Step 1)
Finish after N cycles or if the recycler has no time left to recycle any item or if the internal recycler storage is full.
In other words: This means for example a blue potion is recycled to a fast inserter, some belts, iron plates etc. Or some other combinations. This is also, what comes out from the recycler.
Of course: you can reinsert the recycled stuff. Now the fast inserter gets a small inserter and a belt and some other stuff. And so on. So - like in real life - deconstruction is as complicated as construction because it need sorting out of needed and unneeded stuff. (*)
I think to built a working recycling factory could be really, really interesting (!), because you need to think with probabilities and how to maximize probabilities to gain a special item. Because it may need to recycle something and then rebuild something other to get what's needed.
And it offers really interesting things! Think for example to an item, which is not researched yet. But there is another item, which can be constructed in 2 different ways: one way includes the not researched item, the other the ready researched. So instead of researching the first item, you can build the second and recycle it and by some probability you will get the not-researched. Could be a very cool strategy.
The rest is tuning: How much time has a recycler? Maybe it makes sense to double his speed or every recycle-step takes a fixed number of time? Will also lower the needed calculations... How much cycles will he do? Endless, till time is over? How many internal storage will he have? ... Edit: Maybe if not enough time is left, items are dropped?
(*) Filtering only the needed stuff is currently very complicated with filter inserters. So by logic, I think we need by minimum a filter inserter, where you can inverse the filter (= insert everything but this!) or - as I already suggested - a filter splitter (see the other thread).