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Musculoskeletal injuries remain a leading cause of disability worldwide, yet successful structural repair does not consistently translate into full functional recovery. This review analyzes current evidence (2020 onward) on functional recovery after musculoskeletal injury, emphasizing the transition from structure-centered to function-oriented models of care. A structured narrative review with systematic components was conducted following PRISMA-based principles, including high-impact studies from databases such as PubMed, Scopus, and Web of Science. The findings demonstrate a persistent discrepancy between anatomical healing and functional outcomes, with frequent deficits in strength, neuromuscular control, endurance, and psychological readiness despite successful treatment. Rehabilitation strategies centered on neuromuscular training, progressive load management, and criteria-based progression were consistently associated with improved functional outcomes. In contrast, time-based protocols showed limited reliability for determining readiness to return to activity. Additionally, psychological factors such as fear of reinjury and reduced confidence were identified as key determinants influencing recovery trajectories and return-to-activity decisions. The analysis also revealed that return to activity does not necessarily indicate full recovery, as many patients resume participation with limitations or at a reduced level.