If I recurse, will my Kinetic Capsule continue working or will I need to level up to be able to run a program on it again? Will a currently running program be interrputed?
A currently running program will not be interrupted. In theory, you could also start a new program, but: Recursion resets your XM tank. You need at least 4 001 XM to run the Hypercube program, so you'll need to reach at least L3 again. I don't know if the other permanent Programs XM need was changed as well, but if not, you'll need to reach L5 for them.