What actually happens to the plastic I put in recycling?
It goes to a materials recovery facility, where it is sorted by type, baled and sold to reprocessors. What happens after that depends enormously on which plastic it is, and the gap between what people assume and what occurs is the source of most confusion.
Sorting is partly mechanical and partly manual. Optical scanners identify polymer types by how they reflect infrared light, magnets pull out metals, and air jets separate by weight. Human sorters remove what the machines miss.
Two plastics have genuine, established recycling markets: the clear plastic used for drinks bottles, and the opaque plastic used for milk bottles and detergent containers. These are widely collected, genuinely reprocessed, and turned into new bottles, fibre or piping.
Most other plastics have weak or non-existent markets. Mixed plastics, films, pots, tubs and trays are harder to sort, often contain multiple layers of different materials, and are frequently worth less than the cost of processing. Depending on local arrangements they may be incinerated for energy recovery, landfilled, or exported.
Contamination is the practical thing within your control. A batch with too much food residue, or with non-recyclable items mixed in, can be downgraded or rejected entirely. Items smaller than a credit card generally fall through the sorting machinery, which is why bottle caps are sometimes asked to be left on and sometimes removed, depending on the facility.
The unsatisfying but honest summary is that recycling rules are local, because they depend on what your facility can sort and what markets it can sell into. Your council or waste authority's list is authoritative; national generalisations frequently are not.