STN is close to London has London in its name and is a far superior airport both airside and landside and far easier to expand than MAN and has a large catchment area
Of course STN is considered a key-asset by MAG as you suggest. But STN has its limitations. As Ryanair's largest base, STN is not an attractive environment for any rival short-haul carrier to consider in direct competition with them. Ryanair have the wherewithall and ruthlessness to crush challengers. This limits short-haul expansion principally to carriers on niche routes not served by RYR, some dedicated holiday flights (TCX, TOM etc) and some competition by EasyJet to the main Mediterranean resorts. There is other limited short-haul presence, but it is unlikely to develop into much more than that.
STN is very strong on cargo and executive jet traffic, areas which coincidentally do not interest Ryanair.
STN has a very poor record of attracting and retaining scheduled long-haul. LHR will always dominate in the SE market and LGW is top choice for overspill. STN will likely win a service from one of the MEB3, and no doubt some leisure-orientated scheduled expansion from TCX and TOM-type operations. But progress much beyond that seems a long way off. Maybe they could lobby niche long-haul players such as Norwegian and National Airlines.
Meanwhile, MAN has a much broader base of business from no-frills through European legacy carriers to both business and leisure long-haul. MAN should offer an average of 34 long-haul departures per day based on projections for S16 ... not quite the lost-cause you describe. STN has its attractions, but MAN is a long way from being chucked in the bin by MAG!
The 1Bn TP for MAN is along drawn out affair not yet started and I suspect will be scaled back or "paused" at the first hint of a downturn.
The TP is actually a very impressive and complex undertaking. Given MAN's need to remain operational throughout the construction period, the TP will be completed in phases over 10 years. That is pretty good considering full operations continuing at the airport throughout. No major construction project of this size - even in a sterile environment - appears in days. As you say, the MAN TP probably would be paused in the event of a major recession. That is actually one of the
advantages of the modular approach. Flexibility is a good thing in a highly-volatile business such as commercial aviation. And if recession does strike, don't expect STN to be immune from defensive measures to protect revenue either.