Given the extremely small amounts of putty that are typically used during any modeling session and the time spent using the material, overexposures to Toluene are very unlikely to occur. Of course, it's still a good idea to work in a well-ventilated space. Interestingly, Toluene, like most organic solvents (particularly the aromatics) has what's called an "odor threshold" that's several times below the level at which inhalation toxicity occurs. The "average" individual can detect Toluene as low as 2.0 ppm, while inhalation toxicity may occur around 50 ppm, the current lowest recommended standard. So just because you can smell it doesn't necessarily mean you're being overexposed to it.
For reinforcement, I did a little "worst-case" math. Say you're using about 2 oz. (~59ml) of lacquer paint and thinner (both contain Toluene) to spray your model, and somehow you were able to vaporize the entire 59ml instantaneously. Let's also assume static conditions such as no ventilation (no spraybooth, no open windows, all doors closed and sealed, etc.), and your modelling area is an average size room (12ft. X 11ft. with an 8ft. ceiling). Depending on the percentages of Toluene in the lacquer mixtures, you can expect exposures within the range of 22.8 to 44 ppm, still below the recommended standard of 50ppm. (The 2oz. is an average of what a poll of ~28 modelers said they use to airbrush an entire kit 1/48-1/35, including prime, top coat, and gloss/dull coat. Same is true for room size.)
Having said all that, does that mean that precautions should not be taken to minimize exposures to any solvent? Of course not. Good ventilation, using minimal amounts, keeping the caps on when not in use, wearing gloves to minimize skin contact, etc., is just good practice. Do you need a respirator while applying putty? The short answer is "no", but if it makes you feel more secure, have at it. (Please notice I said puttying, not painting: totally different animal.)
Hope this helps a little.
Gip Winecoff