Perhaps. Thieves don't strike me as the type to be more eco-conscious than average, though. I'm betting they're mostly just thrown out. Many people can't be bothered with the hassle of trying to sell a used device.
I had the buyer of my stolen iPhone 8 on eBay contact me and say "Hey, it says this phone is yours - since you've probably already replaced it, can you help me unlock it so I'm not -also- getting ripped off?".
They "recycle" them by going to Walmart and putting them into a recycling kiosk like [1] and get cash/gift cards instantly. They're not recycling so much as fencing....
Used to be very common for someone to buy an iPhone on eBay, realise it was activation locked and then see comments everywhere on how to remove it.
My guess is many of those people would end up just throwing the phone away.