1. I think it's ok if it is instant. It isn't "really" instant, since the duration of an exchange and an action are very variable, but from a mechanical stand, I would grant the new powers immediately after the characters power shuffle action.
2. Nope. I think you have to have the recovery power while taking the consequence. I would allow you to shift to another power, then back and then remove the consequence, but you have to have the recovery power when you are getting hit, otherwise I feel like it is sort of cheating, even if it is a RAW power.
Recovery powers are best made baseline. Even on Were-Forms, the recovery power is often not even covered by human form, probably for exactly this reason.