They do, even if it was outsourced. Which it isn't, at least in Europe last time I talked tpo people. Liquidators, companies buying returns graded as unsellable, are used a lot so. Whatever they do with the stuff buy wholesale from Aamzon, and others, isn#t necessarily Amazon's or anyone else problem, if you ask me.
Amazon does have all the data, downto the individual returns, about the processing, decission, reason codes and final fate (sodl as new, warehouse deal, sold as used or liquidated, donated,...). They also have every reason to not share that data publicly.