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The best reason to keep old items is when you are fighting enemies with both dodge and ironclad. This way you might be able to equip one or two characters to do damage in the sweet spot. I created a strategy where I want to lower the health of a bird so I keep my non-duplicate offhand items too, but I doubt anyone else would use my strategy.
Another potential reason to keep old items is to use the golden gun set and put the game on autoplay in an area where you can keep on generating snoutlings.
There is no need to recycle items unless you run into the problem I experienced where the game kept duplicating my items. The good thing is that I obtained about 20,000 essence and a whole bunch of snoutlings too, but the bad news is that I can’t change my equipment because the game was duplicating items faster than I could recycle them so my inventory got so large the game crashes if I try to open it.