Steve Deckert
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If by recessed wall you mean the one with the bookcases, I would leave it as is. Having a room that is not a perfect rectangle is generally better than one that is.
After the carpet, report back here with the results. The carpet is part of goal # 1 - absorption. Once it's in, we'll figure out if additional absorption on the walls is needed. Step two will likely be some bass traps.
Steve
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