We are basically doing the same on my project - the specs called for CIPR (Cold In-Place Recycling) - and this forms the "base" on which profile correction asphalt is placed, then the pavement structure. The big problem here is that the suitability depends a lot on a number of factor one of which is the material under the CIPR layer. We've had the garbage pit full - just about anything.
Now the choice of rehab or reconstruct depends on a number of factors - one of which is the geometrics of the new road. If the horizontal alignment is straightened, you will have a lot of "new" sections or side-embankment sections of partial width. If you use CIPR in these cases, you may end up with longitudinal cracking from the "stable" existing and the less stable new (say with respect to foundation support and the little "adjustments" embankments make). If the vertical alignment is changed, then you may end up with a lot of profile correction asphalt - or varying thicknesses of granular on top of CIPR before the pavement. If the road width changes, then you have the problems associated with "new" partial embankments where the match line is down, perhaps, one of the wheel paths.
Given the above, my personal opinion is that CIPR is fine when the profiles don't change (horizontal or vertical) and when the underlying support to the CIPR layer is well established and known. I further believe that these should be for secondary and tertiary roads. For primary roads (interstates/national highways (thinking more of overseas ones)), I'd probably lean to reconstruction.
The above discussion is with caveats, of course. As Laser28 points out (
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to him) get a pavement/highway specialist onto the project. It will be money well spent - compared to possible mistakes in the choices that lead to major problems during construction if design found inadequate.