When to discard weak AA cells?

I recently purchased a smart charger (IQ-328) and have been entertaining myself by testing the capacity of my 25 or so AA NiMH cells. Some are 5 years old, others maybe a a year or two.

A few 1800 mAh factory rated cells are now only holding about 800 mAh even after a refresh cycle. Should I discard (recycle) them? I run my weaker cells in my low-drain devices like computer mouse, thermometer, etc. but I didn’t know at what point to just switch to something better.

To some extent that’s entirely up to you. If you get the performance out of them that you want, keep them. If not, move on.
Conventional wisdom says below ~80% capacity is time to dump them. But there is also the performance factor. Often internal resistance goes up, performance goes down, but capacity is not yet significantly affected. On low drain devices this is not much of a problem.
BUT….old cells are generally not LSD so they self discharge in low drain devices. Right now I’m charging 12 non-LSD cells used in some area lights that were never (seldom?) turned on but are near dead from sitting a couple months.

Old cells will have higher internal resistance. This can play havoc with ‘smart’ chargers. Not an issue with slow ‘dumb’ chargers.

Note - sometimes brand new cells won’t have 80% of the (exaggerated) new specs. This is far less an issue in quality cells.

800 mAh could still be pretty useful in any light or device that not very demanding. You have them, you might as well use them.

That doesn’t sound like a budget convention.

When they won’t hold a charge for longer than a couple of days it’s time to recycle them. Really at this point you are wasting time and electricity charging them.