The recycling of crates works the same as other duplicate cosmetics recycling meaning that you can recycle one item or recycle duplicates. Recycling duplicates does not mean recycle all rather it means recycle everything but one of an item. So if you recycle duplicates of 5 crates it will recycle four of those crates for 4 crafting materials and leave you with one crate left over. This is mainly in place to prevent people from losing all copies of an item unintentionally. You can still recycle that last single instance of a crate if you do in fact want to recycle all.