[Halc]

The tidal distortion (bulges on both sides of the earth nearest and furthest away from the moon) is what's important for the recession of the moon.   The oblate-ness of the earth due to it's rotation is a more permanent bulge around the equator, which is interesting but nothing to do with why the moon is receding?

I wouldn't go so far as to say 'nothing to do'. They're both effects of Earth's spin.  The spin causes the oblate shape. The angular momentum of Earth's spin is what is being transferred to the lunar orbit. Some energy as well, but most of that energy is lost as heat.

Returning to the main topic,  the tidal effects from the moon would seem to generally increase if the moon did come closer to the earth (with the moon having much the same mass).

Yes. The moon was much closer in the past, and the day was perhaps 10 hours long like it is on Jupiter. The tides (assuming oceans of the same volume as today) would be much higher.

Which would then tend to oppose progress toward the earth and encourage recession.  Unless the mining operations on the moon are astonishingly rapid, this may help to prevent the moon spiraling into the earth.

That all depends on what forces are put on what's left of the moon. If you keep the system closed (no mass is allowed to leave the system), then mining the moon would probably send it into higher orbit. It isn't going to crash into Earth.
On the other hand, eventually the moon will reach a maximum altitude and cease this recession. At that point it will begin to spiral in very slowly as energy is drained away by solar tides. The day will eventually become very short again and the moon will impact Earth, all without any mining help. Of course, before this happens, the sun will turn into a red giant and probably (not definitely) swallow both, so the above is assuming the sun is immortal. It also assumes the moon will not break up, which in fact it will. Earth will get a nice set of rings to make Saturn jealous.

However, maybe most of the energy lost would be noticed in the reduction of earth's rate of rotation.

Left alone, the day will eventually max out around 1500 hours before it begins to shorten again. The moon will appear quite small (no total eclipses anymore) and permanently in one spot in the sky for the half of Earth that can see it.

[evan_au]

if the earth quickly moves to a state of being tidally locked to the moon's orbit

It won't be quick - about 50 billion years.
- Long after the Sun goes Red Giant in about 5 billion years - it is unclear if the Earth and Moon will survive this
- Long after the Earth's oceans boil dry, thought to be in about 1 billion years - unprotected life will not survive this

So I don't think you need to worry too much about it...
See: https://phys.org/news/2015-11-tidal.html