I kind of like how this fireplace surround appears set in the wall. With this particular style built in shelving on either side of the fireplace would likely look odd. I like the set up though and the colors used.
tv is not recessed in here. wall is closed in as though ours would be without the windows with the brick going high and wide. furniture on the sides to create a conversation area. the fireplace does not protrude out too far so it matches our limitation there.