Can you NOT recruit Halsin when doing a good playthrough?

[V]

As I remember form my previous playthroughs, I never had a choice to decline Halsin to join my party. Is it even possible?

[Tingly]

If you consider rescuing Halsin to be mandatory on a 'good' playthrough, then maybe not. Maybe you could be a big idiot while being good, and think you're saving those goblins in the jail from a rabid bear which you help them kill lol. Or again as an idiot, you wander away from the area without resolving the goblins/tieflings plot, not realizing the consequences.

[Cartesian Duelist]

If you clear the entire goblin camp and kill the three true souls in the basement without ever going into the worg pen, Halsin will free himself with no help needed from you. When you go back to the druid camp, the tieflings will be packing up to leave and Halsin will be there.
When you talk to him at the party, I believe you can choose to not have him join you.

[TwinCats]

You need Halsin to remove the curse. After this, you don't need to communicate with him; he will silently stand in your camp as furniture.

[Mithlond]

If anyone still is looking for a "solution" to not having Halsin around here is one I've just used.
Play the game until you need to rescue the boy in Act 2. After that quest is finished add him to your party and shove him off of a cliff somewhere so he dies. Then talk to Withers and let him watch over Halsin. Halsin's tent will still appear in your camp but his spirit will be in front of it. Now you don't have the big papa elf standing around in camp anymore!