They don’t by and large, unless the system is set up for strict separation, and can fund separation at receiving point. That’s why majority of municipal recycling ends up in landfills anyway. Contaminated recycling (I.e. garbage/food/non recyclables with your PET plastic or paper) just meant the the whole batch will be rejected.
Some recycling techniques can handle some contaminants. If you melt metal or glass then any contaminants will just end up as slag and can be scraped off. With compost they can sieve through the end result to pick up anything which are not biodegradable. But in general domestic trash needs to be sorted by hand to be more usable. There are some robots which can do some of this but there are still a lot of people working as trash sorters picking out things from a conveyor belt which should not be there. It does help them a lot if the trash is somewhat sorted though and they might decide to just redirect everything into the landfill if it is too hard to sort. Sorting the recycling does therefore help a lot but you are not the last person to see the trash you put in your recycling bin.
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