The issue is prior restraint. If you sell someone a product marked in such as way as to create an expectation that it will be recyclable, taking no steps to dispel that belief, and it turns out not to be recyclable, then you've committed fraud. The buyer would have a legitimate claim against you for any costs which resulted from the product not being recyclable, for example if they had to pay extra to dispose of it as garbage rather than recycling. This is not the same as saying that it ought to be illegal to apply the recycling symbol to the product in the first place, since merely applying the symbol is not a sufficient condition to qualify as fraud. For example, there could be an accompanying disclaimer (or expectation that a "reasonable person" would know) that while the product is recyclable, it may not be permitted in the regular recycling bins in the buyer's region.
