The growth of the advanced composites industry has generated significant volumes of non-biodegradable industrial waste, particularly the low-density polyethylene (LDPE) protective cover films discarded during the layup of thermoset prepregs. Conventionally destined for landfills, this study presents a circular economy approach by upcycling waste LDPE film stripped from commercial glass fiber/epoxy prepregs into functional, value-added natural fiber-reinforced polymers. To evaluate the impact of textile processing additives on composite performance while maintaining a low-carbon footprint, two distinct fiber conditions were investigated: jute fabrics were utilized either in an as-received state following thermal drying at 105 °C, or subjected to a mild neutral soap wash prior to drying to eliminate the detrimental effects of weaving lubricants and waxes. The composites were tailored to a target fiber volume content of approximately 30% and fabricated using an alternate film-and-fabric stacking sequence, followed by hot plate compression molding. The scientific novelty lies in making no effort to remove residual epoxy traces from the waste LDPE films, leveraging this "contamination" as a functional compatibilizer to bridge the gap between the hydrophilic fiber and hydrophobic matrix, thereby enhancing interfacial adhesion and minimizing void content. Given the inherently random distribution of this industrial residue, gravimetric analysis via solvent washing of film specimens is utilized to quantify the average epoxy content. Tensile and three-point bending tests yielded highly consistent results across the fiber conditions, closely matching micromechanics theoretical expectations with values of approximately 3 GPa for modulus and 40 MPa for strength. Furthermore, interlaminar shear strength (ILSS) short-beam testing and optical microscopy comprehensively probe matrix impregnation and clarify the localized bonding mechanisms. A comparative analysis of these combined properties demonstrates a highly viable strategy for converting complex industrial polymer waste streams into new, functional material outputs.