When plastic is recycled, it gets sorted first. The bottle, label and cap are all different plastic compositions. If they were to mix, it could potentially cause a health or fire risk when the material is re-melted later on. Source: Me. I work with plastics at my job.

I figured as much, having formerly worked in plastics myself. Contamination was a big deal and we had it happen all the time because people wouldn't clean out the hoppers on the machines properly.