increased fuel economy Prius

Check the owners manual. Most manufacturers don't recommend leaving the control in this position because it's potentially dangerous.

It depends on how tight the car is in general

If it is completely tight you might run out of oxygen

Is that likely?

They could have a safety valve so if the oxygen level goes below a safe level it might open a window or a door and let some oxygen in

If you have a leaky exhaust system it could be dangerous but otherwise the problem is that your windows will fog up eventually.

Volvo (in the days when they were Real Volvo, not Fake Ford), as in the 440, ensured that one-fifth of the "recirculated" air in fact came from outside, to prevent a dangerous O2/CO2 mix.

I have wondered about Toyota's thinking on this.

My celica mists up within minutes if i leave it on recirc. It also doesnt warm up any faster or slower, but i do cos its not blowing icy outside air in :D

Even on full re-circulation mode, a certain percent of outside air is still allowed in to thwart people from carbon monoxide poisoning. I believe this is true of most manufacturers.

How does that help mpg?

I'd expect putting the heater on Cold would help, regardless of vent control - is that the same thing on a Prius?