They do an upgrade, ever server/switch/router etc ends up in the dumpster
How many customers do this?
At least here in the Bay Area, hard drives and SSDs get destroyed, but a lot of the other equipment goes to e-waste recyclers who end up refurbishing it and selling it on marketplaces like eBay.
A lot of homelabbers get their equipment from eBay, and the source of that equipment is almost always second-hand data center equipment.