It is probably me, but I cannot get this to work autonomously.
I can either insert something OR process and withdraw it. If there is a continuous feed, the condenser will never even start processing. Only when I cut off the inserters does it do its magic.

What am I doing wrong? Am I expected to use circuits to run timers (e.g. inserters 1 minute on, 15 seconds off)?

Also, is there a simple way to have the withdrawing inserters not take out all that was inserted? My current solution is to forbid those to take normal quality, but then the same condenser cannot be used for two different tiers (though this might be on purpose).

Apologies if I am missing a glaring obvious answer.

for performance reasons the machine is designed to work in bulk, so it expect you to fill it fully each cycle.

and yes it'll be tricky to make the machine output several qualities, note that you can connect a circuit wire to the outer edge of the machine so you can hook it up so the inserter only takes out what's above a certain threshold.