Yes, the item disappeared from your inventory and was replaced by the component parts. Yes. No. You clicked on the smelter and a window popped up asking if you wanted to use the traditional smelter, the recycle option, configure the amount of items returned thru recycling, and if XP was gained by recycling. Then you clicked on what items in your inventory to recycle. It was more elegant the the current reverse recycling mods. Instead of 20 recipes showing up that are all named "iron ingot" and trying to figure out what to recycle and what not too, you just clicked on the item in your regular inventory and it was recycled. Small items would return a type of ingot "fragment" that required 2 or more to become a usable ingot and larger items returned whole, usable ingots, or leather and strips if using the tanning rack.