This version will fill up the train car first, then when the output chest can't be fully emptied into the train car, it will start recycling items in the train. Not as high a duty cycle as the first design, but much more compact, and MUCH MUCH easier on the game engine... i got a huge performance boost after switching over all my recyclers to trains (not as much state needs to be tracked on belts)

Because we cant read the contents of a freight wagon without the engine at a stop, we have to use a chest we can read the contents of to do our sorting, hence the chest on the output of the recyclers that then feeds into the train.

To prioritize recycling from the train, the inserters feeding from the input belts are disabled if the output chest has any items (i.e. the train car is full)

This setup keeps the recyclers nearly always busy, so there isn't idle time. Because the local scrap loop is local there is a ton of similar items, so the recycler has a much higher chance of grabbing what it is already processing, which is a huge efficiency improvement when it doesn't have to change recipes

This reduces the amount of time sending unneeded parts though the entire post recycler sorting belt system.

Because only what is needed is sent out the recycler area can be more dense for the same footprint on a oddly shaped island.

When trains arrive to unload scrap there isn't any other material being recycled clogging up the bus, so they can immediately unload. Ive really seen a increase in train throughout.