You can still have a working battery even with some "bad" (i.e., way out of spec) cells, depending on the BMS. All the thresholds are configurable, just that a regular EV setup would lean towards safety.
This is true (and in some cases potentially dangerous) when you have a several cells of varying voltages in parallel but it's fairly trivial (by EE standards at least) to overcome this with something similar to a charge pump.
they’re being unreasonable
No one is being 'unreasonable' you just started talking about something different.
I'd wager the bulk of them are hybrids where the batteries see a pretty aggressive charge/discharge cycle on a relatively small capacity (and therefore being relatively cheap to replace compared to a full electric). Of course then there are also full electrics where the owners get upgraded capacity or replacements due to degradation from use.
And importantly they aren't just recycling EV batteries here. They are using lithium-ion, nickel metal-hydride, and lead-acid batteries. So they are also buying up traditional ICE automotive batteries as well.
Also worth noting this project is a collaboration between Toyota, JERA, and local universities for use at JERA's facilities. JERA is a large battery reprocessing and recycling company so they are already getting second hand batteries into their facilities on a regular basis. This project is primarily about doing the design and engineering work necessary so that JERA can set up an array of these battery containers, get notified when a unit fails, and swap out the battery with one from their stock for recycling.
I have been out of the battery tech game for a while now but decades ago we were balancing individual NiCd and NiMH cells for optimal performance, is this basically the same thing?
https://electronics.stackexchange.com/questions/463591/nicke...
In a parallel bank, a single cell going bad can bring down the rest to the same voltage. Even worse, if the bank is directly connected to other banks it can take out them as well. Also, if there is an internal short in one battery, the rest will pump current through it very effectively lighting it on fire. Individual battery protection circuits, smart switches, and internal short detection can help with this.
Parting out two or three dead battery packs to cull the best of the survivors can improve things quite a bit. And as you say, on a stationary pack you can afford to overdo telemetry, cooling, and safety circuitry because it doesn’t have to move, let alone accelerate.
I don’t know what the half life is like for the reused cells though. Do the cells that lasted twice as long as their neighbors continue to outperform or do they revert to the mean over time? I could see either being true. The days when you accidentally produce cells that are several stddev better than your target quality should make cells that last longer, unless they’re sold to a leadfootted driver.