Hi,
Supposing you're using HikaSubscription for your subscriptions, if you have the "Make recurring optional" setting turned off in the configuration page of HikaSubscription, you'll get automatically only PayPal recurring for products with a subscription plan attached to them.
And in the PayPal recurring payment plugin, you can turn off the "handle no recurring" setting so that when products without a plan attached to them are in the cart, that payment method won't appear.
So you should not need to restrict payment methods to categories/products to do that.
Regarding PayPal recurring not working, we would need more information. Could you provide a screenshot of the settings of the payment method ? Could you provide a link to the shop and instructions to reproduce the problem ?