Since crayons are substantially paraffin wax, the hydrocarbon chains only need to be heat cracked once per chain on average and that will result in mostly diesel. I believe that what you saw was real...but not exactly noteworthy.

I would also agree that the logistics in getting 40 tons/day of defective crayons would be nearly impossible.

If Crayola produces 40 tons of defective crayons per day then they would be looking to improve their process...especially since a Google search shows Crayola makes three billion crayons per year and at about 2 grams each, is only about 18 tons per day. Crayola would have to triple their output and discard 2/3 of that output to produce the 40 tons per day.

But even there if we assume 1% of crayons are defective, Crayola could still deliver forty tons maybe once a year. If the cost to deliver and feed in the crayons is under about $0.10/lb and if the resulting fuel could be sold as diesel, the processor could at least break even that day.