The recycling model is false, it is the Hindu model, not the Buddhist model. The personality is an expression of the soul, which is an expression of its source, which is an expression of the divine.
So it is more like a tree.
Simplified:
There is also a lot of "fake light", which attaches to our soul and makes us follow religions. But there is also a real light to which we return, and reconnect with the divine. This real light is via the inner child, sometimes via nature.

People that are disconnected from the divine do think that only the physical is reality. They get stuck in fixed believe systems, as they can not experience much outside their believe systems. (Unless get get in an accident).

The problems cause a "samsara" of our personalty in this world, as it gets stuck in desires and belief-systems.