While significant efforts have been made to recycle metals like lithium or cobalt for sustainable development in the battery industry, the reuse of other high-value materials, such as fluorinated carbon nanotubes (FCNTs), remains underexplored. This study introduces a novel, eco-friendly method to repurpose quality-downgraded FCNTs (QD-FCNTs) as effective nano-additives in polyacrylamide (PAAm) microgel composites for water retention applications. Because QD-FCNTs are rich in surface defects, by employing a mild surface treatment with a low dosage of organic electron donor N,N,N′,N′-tetramethyl-p-phenylenediamine, we enhanced the hydrophilicity of QD-FCNTs without additional energy input or a large quantity of harmful chemicals. This treatment significantly improved the interaction between QD-FCNTs and PAAm microgels, leading to a 55% increase in water retention time compared to the composites made of untreated QD-FCNTs. Our findings present a sustainable approach to extending the lifecycle of FCNTs, contributing to the circular economy and offering practical solutions for potential water management in agriculture and environmental technologies.