With the legendary rocket as the win condition, it was surprisingly easy, trivial even, to go from common scrap to legendary scrap with just two recyclers filled with quality 3 modules. Since legendary scrap recycles into legendary items and vice versa, as soon as you have a couple pieces of legendary scrap, quality is completely out of the picture. (Just drain and restart the existing setup)

Now, I'm not sure what you can realistically do about that to actually make it a challenge (and not just delay the process through forcing the player to scale), but dropping quality modules' quality percentage may be a good start.
If you want to rain hell on your players, quality scrap could also have a chance to recycle into lower quality items, but that feels a bit too intense for how chill the rest of this mod is.

On one hand I kind of want to agree, because yeah it is a bit overpowered getting higher quality things permanently, but on the other hand...
Well, this mod is already a gimmicky shitpost. I feel like trying to balance it out or make certain parts of it more challenging would water down what it already is, and I also find it quite funny that quality is completely susceptible to the infinite trash growth, completely turning the mechanic on its head.
Anything else I do with quality will also make the mod more complicated, and I've become quite fond of the emergent complexity from the simple rules it has.