Am I allowed to pass on a recommendation letter used for a separate occasion?

Building off of the situation in this previously asked question...

I am in the process of interviewing for other job opportunities. My boss is aware that I am most likely looking for other work because of the current lack of pay. He has been very cool about it because he empathizes with my situation. He tried his best to get me more but upper management wouldn't budge. Note that this is also my first job in the software development field and I currently have 18 months of experience.

I'm at the point where I am speaking with a recruiter and he has asked if I would be able to obtain a reference from my current employer. Despite being good friends with my boss, I am not comfortable asking him to be a reference. This is because I recently asked if he could speak to upper management about becoming a full-time employee. I've always been seeking new employment but opportunities haven't really shown up until recently. If I do find new employment, I intend to give him one month notice as a courtesy because he has been an excellent supervisor.

Now, I do have a recommendation letter from him that he updated recently for a scholarship award that I actually won. Is it wrong (or even illegal) to pass this on to the recruiter as a reference? Would a recruiter even accept this? I wouldn't change anything in the letter because I'd want it to be clear that this was used for a separate occasion. However, I'd really like to have some evidence of my abilities and personal character from a professional I've worked with and not just professors that I've studied under.

I would not recommend "repurposing" a recommendation letter from a scholarship into a letter for employment.

First, they are not the same audience, so while it may get the job done, it could be better.

Second, and more important, you want your references to know ahead of time that they may be getting that phone call. If your manager already knows that you're looking, he can be a great ally in your hunt. If he already knows anyhow, then at the very least, tell him what the recruiter asked, and ask him if you can reuse the scholarship letter for this. It sounds like he'll say yes, and he may even offer to update it for the new purpose. At the very least, he won't be surprised when he gets the phone call, and can be prepared to answer strongly on your behalf.

Changing jobs, especially when it's your first job and you're hitting that "enough experience" mark, is the way of the world, and good managers understand that.

Again, I encourage you to talk to your manager about it first.