The rapid proliferation of spent lithium-ion batteries has created an urgent need for efficient recycling of graphite anodes, yet industrial adoption remains constrained by economic and technical barriers. This review systematically examines the underlying causes of this stagnation by analyzing current industrial practices, graphite degradation mechanisms, and academic recycling strategies. Analysis of the industrial landscape reveals that prevailing recycling processes roughly adapt from primary material production, leading to an imbalanced industry structure and a fundamental mismatch between industry graphite recycling and market demands. Further investigation into degradation mechanisms demonstrates that the decline in electrochemical performance is predominantly governed by surface-level deterioration, revealing the mismatch mechanism. In response to the mismatch, academic advances have developed targeted regeneration strategies that directly address the specific failure modes of spent graphite, thereby offering viable pathways to resolve the industrial mismatch. Therefore, by integrating insights from both industrial practice and academic research, this review delineates a clear pathway forward that graphite recycling must undergo a paradigm shift from rough reconstruction toward precision repair.