I built machinery for plastics recycling for 7 years. The plastics producers were extremely picky about what could be ground down into pellets to be evacuated to the beginning of the injection molding process. To my knowledge, about 99% of what was being "recycled" as they call it, were "in-house" plastics. Basically material that never leaves the manufacturing facility it's created in. This could be just about anything that doesn't meet QA standards. So like, your product has a big bulge in it, or it's the wrong density, color, etc. I've seen our granulators in action when I did service, and you wouldn't believe how much needs to be re-made. There was a dude with a sawzall who's whole job was to cut the tops off these big containers, and load them in the granulator. 3 shifts in a row there was someone doing this, 24/7.

This is getting beside the point but I do know that a little bit of the wrong color dye getting into the granulator would ruin the whole batch, and it would go to waste. So no, there's no way that big piles of random garbage are getting turned back into re-usable plastics, unless the recycling facilities are doing something different or have some sort of equipment I'm not aware of. I know they don't buy any granulators.

It's a bit of an open secret in my county that al recycling goes to the dump anyway. They don't even try for easy stuff like cardboard. Same as a lot of places in the US.