The tech advised that all HDs erased and sent for disposal (or sometimes for repair).
He was speaking of Apple btw, not of his store or him personally. On most warranty repairs, Apple requires the old part ("module") be returned to Apple. Only a small number of the parts returned are actually refurbished. (logic boards for example) and most are simply thrown away. Purely cosmetic or mechanical parts or parts that are more hassle than they are worth are NRET.
The reason they want them back is to prevent insurance (warranty) fraud. Some parts start out NRET (non return) but change to return required if they are abused. This happened more than once with mice and keyboards, AASPs were filing warranty claims to obtain new in box mice and keyboards to sell. Now that they have to return the old ones, they can't do that trick anymore. Apple is as of very recently requiring logging of serial numbers for bad and replacement parts also, possibly to further tighten down on this issue. (tho claimed for quality tracking purposes, which is probably also the case, but who's to tell which of the two is the primary reason?)
As to your hard drive, it will be shipped back to Apple without being erased. What Apple does with it, I have no idea and I doubt that tech can tell you with any authority. Your best bet is to call Apple and ask them.
The drive will NOT be going back to Seagate/WD/Hitachi. Apple is an OEM and gets the drives on steep discount because they don't come with a manufacturer's warranty so they can't send them back to the manufacturer for replacement. Most electronics nowadays are such a conglomeration of different impossible to separate materials that recycling them is impractical. A lot of such things get packed on a boat and dumped off on someone overseas that "disposes of" them, by means that no one wants to hear about. I don't know how much of that Apple does. A FEW things are big on recycling, batteries being the big one I can think of. Heavy metals in batteries are very much in demand in the recycling sector and they've gotten good at reclaiming them cost-effectively.
It would not entirely surprise me if the only things that Apple actually doesn't throw away or sell to someone else or pay to take away are logic boards, LCD panels, and batteries.
Unless someone vouches otherwise, I would not expect the hard drive to be erased or rendered completely unrecoverable before it leaves their hands.
