The plastic will be grounded up and re-used, that's 100%, but it still requires quite a bit of virgin pellets to be mixed in. Here's why:

1. Used plastic is dirty. Even if it just came off the belt as a brand new part, it already has dust, oil and other residue. Just a little bit, but it's not as good as a virgin material.
2. You cannot grind down parts into perfect pellets, and that will cause feed rate variations.
3. Additives inside like dyes degrade when heated. Multiple extrusions will change product appearance.