What do you use the new scrap for?

Metal scraps can be smelted back into plates.

Do you need a recycler?

Nope! Reusing scrap is unlocked at the same time as smelting the metal itself. Same with the circuit scrap but for crafting new circuits with a few extra materials.

Does this modify results from Fulgoran scrap?

Not yet, but I am planning on changing that optionally.