So after looking at this again I don't see a reason it should have entered recovery. The issue that I spoke about earlier was a Red Herring and has been around for a while. Essentially when we output all of the settings at the top of the log some of them are the default values as the settings system hasn't been initialized yet.
So it's very probable that recovery was on but it didn't get triggered. You start dithering around 1:33:
[13/06/2016 01:33:52] [DEBUG] [Sequence Thread] PHD2 GetPhdStatus - Post-Wait: Guiding
[13/06/2016 01:33:52] [DEBUG] [Sequence Thread] Waiting for Auto Guider distance to fall below 1
And it completes at 1:41:
[13/06/2016 01:41:20] [DEBUG] [Sequence Thread] Distance stayed below 1 for 5 seconds, done settling...
[13/06/2016 01:41:20] [DEBUG] [Sequence Thread] Auto guider has settled...
This is well within the 15 minute timeout for dithering. So recovery was not triggered. PHD did tell us the star was lost which would have triggered a frame restart event, but since you were dithering there was nothing to restart.
Hope that helps,
Jared