In recent years, large quantities of carbon fiber-reinforced polymeric (CFRP) composite waste materials have been discarded during the production of composite structures, prompting research investigations into recycling and upcycling. In this article, we present a quantitative investigation of the manufacturing defects present in CFRP composites made of repurposed scraps, and their effect on tensile properties. We manufactured carbon/epoxy woven composite specimens from upcycled prepreg scraps of different sizes using an out-of-autoclave curing method. We captured over a thousand microscopy images of the specimens’ microstructure, enabling us to quantify material defects via optical microscopy, scanning electron microscopy (SEM), and image processing. Quantified defects include laminate thickness variations, voids, scrap gaps, and resin-rich areas. The effect of different scrap size and scrap layup on the nucleation of these defects was investigated. Experimental testing results show the layup pattern of scraps significantly influences tensile strength, primarily due to the low interfacial normal strength between two adjacent scraps and the high void content. Plates with an overlapping brick-style layup and smaller scrap size exhibited fewer defects and higher tensile strength compared to plates with no overlapping regions and larger scraps.