Ok, so the air control flaps are after (as the airflow goes) the heat exchange fins on stock heater boxes. So, when the flaps are closed, does the heated air in the heater boxes recirculate back into the fan shroud?

I've been around VW's for 11 years and this concept has only occurred to me now...

No, air is diverted to atmoshere when heaters are off.
So effectively dumped next to the gear box.

I have seen it done on a kombi where they fed cabin air back into a booster fan that feeds back through the heat exchangers (the booster fan is stock on later bay kombi's). Smart way to help in cold climates.

im sure the old stale air systems would be the same but on the fresh air heaters which have the 2 hoses coming off the fan shrouds there are bypass valves on the back which dump the air when the heaters arent in use

this is necessary as otherwise they turn into ovens and the heat radiates straight up to the heads
thats what happenes when all the clueless people remove and block off there heater hoses thinking it will "improve" their cooling when its acutually doing the opposite

a company in the UK made a recirculation kit which worked well but didnt take this into account.