The wood in the radii is lost to sawdust. Perhaps they sell this sawdust as a product, but it’s more likely just to make it easier to handle and less likely to get damaged or damage something else.
It’s a “coproduct”, the value of which is roughly inverse to the price of lumber and other finished manufactured end products.
It goes into things pulp and paper, pellet stove fuel, cogen plants and if useless for anything else, the “hog” in the basement of the mill.
Fun fact: any contamination of chips with plastic or metal makes the value of a load as large as a rail car worth zero, so QC are super anal about keeping it out